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Fixed vs ARM Calculator โ€” Compare Mortgage Types

Compare fixed-rate and adjustable-rate mortgages. See payment differences, break-even, and when each makes sense.

Concept Fundamentals
$2,661
Fixed Payment
$2,398
ARM Initial
$263
Monthly Savings
ARM
Better Option
Compare Fixed vs ARM

Why This Matters for Your Finances

Why: ARM often starts lower. Fixed gives certainty. Break-even depends on how long you stay.

How: PMT = P ร— r(1+r)^n / ((1+r)^n โˆ’ 1). ARM adjusts after fixed period. Compare total cost over your stay.

Sources:CFPB โ€” Mortgages

Sample Scenarios

Loan Information

Mortgage amount
$
30-year fixed
%
Starting rate
%
Annual cap
%
5/1, 7/1, etc.
years
Time in home
years
fixed_vs_arm.sh
CALCULATED
$ analyze --type=mortgage-comparison
Fixed Payment
$2,661
ARM Initial
$2,398
Total Difference
$10,701
Better Option
ARM

ARM Saves $10,701

Over 7 years, with ARM adjusting after 5 years.

Fixed Rate

Rate7%
Monthly$2,661
Total Paid$223,542

ARM

Initial Rate6%
Initial Payment$2,398
After Adjustment$2,873
Total Paid$212,840
Fixed vs ARM Calculator
ARM Saves
$10,701
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Calculation Breakdown

Loan Details

Loan Amount$400,000
Years to Stay7 years

Fixed Rate Mortgage

Interest Rate7%
Monthly Payment$2,661
Total Paid (${yearsToStay}yr)$223,542
Total Interest$188,131

Adjustable Rate Mortgage

Initial Rate6%
Fixed Period5 years
Initial Payment$2,398
Adjusted Rate8%
Adjusted Payment$2,873
Total Paid$212,840

Comparison

Initial Monthly Savings$263
Total Difference$10,701
Better OptionARM

Get AI-Powered Analysis

Get personalized Fixed vs ARM advice.

When to Choose Each Option

Choose Fixed When:

  • โ€ข Staying long-term (7+ years)
  • โ€ข Want payment predictability
  • โ€ข Rate spread is small (<1%)
  • โ€ข Risk-averse / fixed income

Choose ARM When:

  • โ€ข Moving within fixed period
  • โ€ข Large rate spread (1%+)
  • โ€ข Expect income to increase
  • โ€ข Can handle payment changes

Key Takeaways

  • โ€ข ARM risk depends on how long you stay
  • โ€ข Consider worst-case ARM scenarios
  • โ€ข Fixed provides peace of mind
  • โ€ข ARM can save money for short-term owners
  • โ€ข Factor in refinancing possibilities

This calculator provides estimates. Actual results depend on rate movements.

โš ๏ธFor educational and informational purposes only. Verify with a qualified professional.

๐Ÿ’ก Money Facts

5/1

5-year fixed period

โ€” Common

2%

Typical annual cap

โ€” ARM

0.5%

ARM discount often

โ€” Market

30yr

Fixed term length

โ€” Standard

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