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Fixed vs Adjustable Rate Mortgage

Deciding between a fixed-rate and adjustable-rate mortgage? The Fixed vs Adjustable Rate Mortgage Calculator helps you compare both loan types side by side, revealing the differences in monthly payments and long-term costs—so you can make the smartest decision based on your financial goals and risk tolerance.



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What is Fixed vs Adjustable Rate Mortgage Calculator

The Fixed vs Adjustable Rate Mortgage Calculator is a mortgage comparison tool designed to help borrowers analyze the pros and cons of choosing a fixed-rate mortgage versus an adjustable-rate mortgage (ARM). With a fixed-rate mortgage, your interest rate stays constant for the entire loan term, offering predictability and long-term stability. An adjustable-rate mortgage, on the other hand, starts with a lower initial interest rate that can change over time based on market conditions.

This calculator helps you evaluate how each option fits into your current financial situation and future plans. Whether you’re buying your first home or refinancing, the tool shows you how each loan type affects your payments in the short term and your total interest paid over the life of the mortgage. It’s an essential decision-making aid in a market where interest rates can be unpredictable.




How it works

Fixed vs Adjustable Rate Mortgage Calculator Works

The Fixed vs Adjustable Rate Mortgage Calculator works by collecting and analyzing inputs for both loan types. First, you enter the total loan amount, loan term, and interest rate for a fixed-rate mortgage. Then, you input the initial interest rate, adjustment period, rate caps, and estimated future rates for the adjustable-rate mortgage. The calculator uses this information to simulate how the ARM’s rate might change over time and how that would affect your monthly payments.

Once the data is submitted, the tool calculates and compares the monthly payment schedule and total interest paid for each loan. It shows you how much you’d pay in the initial years of the ARM (usually lower than a fixed-rate loan) and how payments could rise after the adjustment periods begin. This allows you to see the short-term savings of an ARM and weigh them against the potential long-term costs and volatility. The tool is especially useful if you’re planning to move or refinance within a few years and want to know whether an adjustable-rate mortgage offers real advantages.



Frequently Asked Questions

What’s the main difference between a fixed and adjustable-rate mortgage Toggle
A fixed-rate mortgage keeps the same interest rate and payment for the life of the loan, while an adjustable-rate mortgage starts with a lower rate that can fluctuate after an initial fixed period.
Who should use an adjustable-rate mortgage Toggle
ARMs are often ideal for buyers who plan to sell or refinance before the rate adjusts, allowing them to take advantage of the lower initial payments.
Is it risky to choose an adjustable-rate mortgage Toggle
There is some risk, as your interest rate and payments may rise. However, ARMs often have caps to limit how much the rate can increase at each adjustment and over the life of the loan
Can I switch from an ARM to a fixed-rate mortgage later Toggle
Yes, many borrowers refinance from an ARM to a fixed-rate loan before the adjustment period begins—especially if interest rates are expected to rise.
How can this calculator help me decide which mortgage to choose Toggle
The calculator shows you the total cost of each option, helping you compare short-term savings with long-term risks. It gives you a clearer picture of which mortgage aligns with your financial plans.