ARM vs Fixed Calculator
Compare an adjustable-rate mortgage with a fixed-rate loan, the lower initial payment, the payment after the rate resets, and the total interest over the years you plan to keep the loan. Runs in your browser.
Cheaper over your horizon
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Show the math
Each loan is amortized and the interest is summed over the years you keep it:
compare interest paid up to your horizon, not the full term
An ARM trades a lower initial rate for uncertainty once the fixed period ends. If you expect to sell or refinance before then, the lower payments can win. The reset rate is an estimate, try a higher one to stress-test the decision, since payments can rise sharply.
What this does
This calculator compares an adjustable-rate mortgage with a fixed-rate loan. It shows the lower initial ARM payment, the payment after the rate resets, and the total interest over the years you plan to keep the loan.
How to use it
- Enter the loan amount and term.
- Enter the ARM initial rate, fixed period, and assumed reset rate.
- Enter the fixed-loan rate to compare against.
- Read the payments and total interest over your horizon.
How it works
An ARM keeps a low fixed rate for an initial period (such as 5 years in a 5/1 ARM), then adjusts with the market. The tool amortizes the initial period at the start rate, then continues at your assumed reset rate, and compares total interest with the fixed loan over the same window.
Understanding your result
An ARM can win if you sell or refinance before the fixed period ends. Because future rates are unknown, stress-test it with a higher reset rate before relying on the lower initial payment.
Example
A 5/1 ARM at 5.5% versus a 6.5% fixed loan saves on payments for five years; whether it stays cheaper depends on where the rate resets and how long you keep the loan.
Sources & methodology
- Consumer Financial Protection Bureau, Owning a Home, Loan options and the homebuying process
- Consumer Financial Protection Bureau, Adjustable-Rate Mortgages, How ARMs adjust and reset
Last updated .
Frequently asked questions
What is an ARM?
An adjustable-rate mortgage has a low fixed rate for an initial period (such as 5 years in a 5/1 ARM), after which the rate (and your payment) adjusts with the market. A fixed-rate loan keeps the same rate for the whole term.
When does an ARM make sense?
If you expect to sell or refinance before the fixed period ends, the lower initial rate can save money. The tool compares interest over the horizon you actually plan to keep the loan.
What rate should I assume after reset?
No one knows future rates, so enter a cautious estimate, ARMs have caps, but payments can rise sharply. Try a higher reset rate to stress-test the decision.
Do you store my numbers?
No. All calculations run locally in your browser.
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