The whole story, as text
A lower rate with a fee, or 11% with no fee? The map at 60 months.
A lower rate with a fee, or 11% with no fee? $25,000 in your hand, repaid over 60 months. One offer charges 11% with no fee. The other offers a lower rate, but takes a fee out of the loan. Over five years, one point of interest rate is worth how many percent of fee?
The answer
2.3%. Below that, the lower rate wins. Above it, the fee costs more than the rate saves. A 9% loan with a 5% fee is $163 from the 11% loan with none.
Why
Find your square. Dark squares: the offer with the fee costs less. Light squares: the no-fee offer at 11% costs less. Each square shows how far apart they are over the full term. Why the term matters: The fee is paid once, up front. The rate works every month. The longer the loan, the more months the lower rate has to earn back the fee.
At 10%: 1% fee, fee offer by $421; 2% fee, fee offer by $93; 3% fee, no-fee offer by $243; 4% fee, no-fee offer by $585; 5% fee, no-fee offer by $934; 6% fee, no-fee offer by $1,291; 8% fee, no-fee offer by $2,028. At 9%: 1% fee, fee offer by $1,162; 2% fee, fee offer by $841; 3% fee, fee offer by $513; 4% fee, fee offer by $179; 5% fee, no-fee offer by $163; 6% fee, no-fee offer by $511; 8% fee, no-fee offer by $1,232. At 8%: 1% fee, fee offer by $1,892; 2% fee, fee offer by $1,578; 3% fee, fee offer by $1,258; 4% fee, fee offer by $932; 5% fee, fee offer by $598; 6% fee, fee offer by $258; 8% fee, no-fee offer by $446. At 7%: 1% fee, fee offer by $2,612; 2% fee, fee offer by $2,306; 3% fee, fee offer by $1,993; 4% fee, fee offer by $1,674; 5% fee, fee offer by $1,349; 6% fee, fee offer by $1,016; 8% fee, fee offer by $329. At 6%: 1% fee, fee offer by $3,322; 2% fee, fee offer by $3,023; 3% fee, fee offer by $2,718; 4% fee, fee offer by $2,406; 5% fee, fee offer by $2,088; 6% fee, fee offer by $1,763; 8% fee, fee offer by $1,093. At 5%: 1% fee, fee offer by $4,021; 2% fee, fee offer by $3,729; 3% fee, fee offer by $3,431; 4% fee, fee offer by $3,127; 5% fee, fee offer by $2,817; 6% fee, fee offer by $2,500; 8% fee, fee offer by $1,845.
One move
Compare the cost of borrowing, not the rate. 9% + 5% fee: $546 a month, $7,776 cost of borrowing. 11%, no fee: $544 a month, $7,614 cost of borrowing. At 60 months the two tie when the fee is about 4.5% for a two-point rate gap. The 5% fee is just past that, so at five years the two offers are close. Fee deducted from the loan, equal cash in hand, no early payoff. Your lender's disclosures are the authoritative figures.
The same map at other terms: two, three and five years. The shorter the loan, the smaller the fee that tips it.
Yours
Which offer really costs less? runs these numbers for any loan. Nothing you enter leaves your browser.
Written and reviewed by Riverbend Crossroads Digital LLC, Friday, October 2, 2026. Figures from the Show Real Cost engine, computed exactly and shown to the cent. Educational, not advice; your lender's disclosures are the authoritative figures. How we calculate · Corrections.