Choosing between a fixed-rate and adjustable-rate mortgage (ARM) is one of the most important decisions in your home buying journey. This calculator helps you compare both options and understand which might be better for your situation.
Initial Period
The time your initial rate stays fixed (e.g., 5 years in a 5/1 ARM)
Adjustment Period
How often the rate can change after the initial period (e.g., every year)
Rate Caps
Limits on how much your rate can increase per adjustment and over the loan's lifetime
You plan to stay in your home for many years
You prefer predictable payments
Current rates are historically low
You plan to move or refinance within 5-7 years
You can handle payment changes
Current rates are high and expected to fall
Extending your loan term might increase total interest paid despite lower monthly payments
Consider how long you plan to stay in your home compared to the break-even point
Remember to factor in all refinancing costs, including application fees, appraisal, and closing costs