For a loan amount of $200,000.00, Loan 1 will result in a points value of $2,000.00, origination fees of $0.00, and total closing costs of $1,200.00. You will pay monthly principal and interest of $1,073.64, resulting in total monthly payments of $386,511.60 and payment savings of $0.00. Loan 2, by contrast, will result in a points value of $3,000.00, origination fees of $1,000.00, and total closing costs of $4,700.00. You will pay monthly principal and interest of $1,043.30, resulting in total monthly payments of $375,586.10 and payment savings of $10,925.48.

The chart below shows you which loan is better in terms of total interest paid. The lower amount is preferable because you will pay less interest on your total amount.