ARM vs Fixed Rate Calculator
ARM vs Fixed Rate Calculator
General Loan Details
Fixed Rate Scenario
ARM Scenario
How much you expect the rate to increase each year after the fixed period ends.
Fixed Monthly Payment
$1,896
Total Interest: $382,633
Initial ARM Payment
$1,703
Saves $193/mo for the first 5 years
Long-Term Cost Comparison
Over the full 30 years, the Fixed Rate saves you $58,136 in total interest.
ARM vs Fixed Rate: Which is Better?
Choosing between an Adjustable-Rate Mortgage (ARM) and a Fixed-Rate Mortgage is one of the most important decisions when financing a home.
Fixed-Rate Mortgage
- Pros: Payment predictability. Your interest rate and monthly principal and interest payment will never change for the life of the loan.
- Cons: Initial rates are usually higher than ARMs. You may pay more interest if you move before an ARM would have adjusted.
- Best For: Buyers who plan to stay in their home long-term (7+ years) or during periods of historically low interest rates.
Adjustable-Rate Mortgage
- Pros: Lower initial interest rate and lower initial monthly payments during the fixed introductory period (e.g., the first 5 or 7 years).
- Cons: Uncertainty. After the fixed period, your rate can increase, causing your monthly payment to jump significantly.
- Best For: Buyers who plan to sell or refinance before the introductory fixed-rate period ends.