Check everything yourself
How the math works
This page explains, in plain steps, how we calculate every number on this site, in the paid guide, and in the calculator that comes with it.
The short version: there is one formula, the same monthly payment calculation every lender and every mortgage calculator uses. We run it three times and compare the answers. That is the entire method, and you can check every step yourself.
One formula
The monthly payment on a loan is the balance multiplied by the monthly rate, divided by one minus (one plus the monthly rate) raised to the negative number of months. In spreadsheet terms:
payment = PMT(rate / 12, years × 12, -balance)
The minus sign in front of the balance is how spreadsheets ask for money you owe. It makes the payment come out as a positive number.
One thing to know: this payment covers the loan itself (principal and interest) over 30 years. It does not include property taxes, homeowners insurance, PMI (mortgage insurance), or tax escrow. Many real mortgage bills bundle those in, so your statement can be higher than these numbers. We leave them out on purpose: they do not change when the rate changes, so they would only muddy the comparison. The worksheets have you write them next to the payment, not inside it.
We calculate three payments
We use one example house all through the site: a $300,000 loan locked at 3.0%, with today’s rate at 6.75% and a $450,000 loan on the next house. Here are its three payments:
| Run | Inputs | Payment |
|---|---|---|
| Payment 1: the loan you have now | $300,000 at 3.0%, 30 years | $1,265/mo |
| Payment 2: the same loan at today’s rate | $300,000 at 6.75%, 30 years | $1,946/mo |
| Payment 3: a bigger loan at today’s rate | $450,000 at 6.75%, 30 years | $2,919/mo |
Then we compare them, in plain words:
- Rate comparison. Payment 2 is $681 a month more than Payment 1. Same house, same loan, only the rate changed. That is what giving up your locked rate costs on the house you already have.
- Upgrade cost. Payment 3 is $973 a month more than Payment 2. That is what the bigger loan itself costs, separate from the rate.
Add those two together and you get $1,654 a month, the one combined jump a lender quote shows you. Splitting it in two is the whole idea: each of the six options tackles a different part of it.
Want proof? Put $300,000, 6.75%, and 30 years into any mortgage calculator and you will get about $1,946. The Decision Spreadsheet works the same way, and every blue cell in it shows its formula when you click it. Nothing is hidden.
Helpful sources
We used official sources to back up our work.
- FHFA Working Paper 24-03, The Lock In Effect of Rising Mortgage Rates (2024)
- Redfin research on homeowners with rates below 4% (2025)
- Recast fees and minimums: the published policy pages of Bank of America, Chase, Rocket Mortgage, and Mr. Cooper, checked July 2026.