ARM vs Fixed Rate Mortgage Calculator
Compare an adjustable-rate mortgage to a fixed-rate loan over the years you plan to stay — including what the ARM payment could jump to after the intro period.
The ARM wins if you're gone before big rate hikes. After year 5 the payment could jump to $2,824/mo.
| Fixed monthly payment | $2,607.70 |
| ARM initial payment | $2,398.20 |
| ARM payment after reset | $2,823.69 |
| Balance at reset | $372,217.43 |
Simplified: the ARM is assumed to adjust once to a single fixed rate after the intro period. Real ARMs adjust periodically against an index within rate caps, so actual costs can be higher or lower. The comparison covers principal and interest over your holding period. Not advice.
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How this calculator works
Who this is for
Homebuyers deciding between a lower-rate adjustable mortgage and the certainty of a fixed rate. The right answer depends heavily on how long you'll keep the loan.
How ARMs work
An ARM offers a lower rate for an intro period — 5, 7, or 10 years — then adjusts periodically based on a market index. During the intro window your payment is lower than a comparable fixed loan, which saves money up front.
The risk is what happens after the intro period. If rates have risen, your payment can jump substantially. This calculator models a single adjustment to a rate you choose, so you can see the potential new payment and weigh the trade-off.
It comes down to your timeline
If you'll sell or refinance before or shortly after the intro period ends, the ARM's lower early payments often win. If you'll stay for the long haul, the fixed rate's certainty usually looks better — and protects you from a painful reset. Set 'years you'll stay' to your honest expectation.
Caveats
Real ARMs adjust repeatedly within caps tied to an index, not once to a flat rate, so treat the after-reset figure as a scenario, not a forecast. The comparison covers principal and interest only. Rate caps, floors, and margins in the actual loan documents matter — read them.
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This site is for educational purposes only and does not constitute financial advice.