Fixed vs. Adjustable Mortgage Calculator

A smaller starting bill is only the beginning. See what an adjustable mortgage payment could become and compare it with a fixed loan.

For two new, fully repaying loans with the same loan amount and full length. The ARM payment is recalculated after each rate change. Taxes, insurance, mortgage insurance and HOA are excluded.

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1. The amount and time you want to compare

Loan amount ($)

This is the money you borrow, not the home price. A $350,000 home minus a $50,000 down payment means a $300,000 loan. Find Loan Amount on the Loan Estimate. Fees in this tool are paid separately in cash.

Use the same amount for both loans.

Full loan length (months)

Use the full repayment length for these two new loans. A 15-year loan is 180 months; a 30-year loan is 360. This is not the ARM starting period. Both loans use the same full length here.

30 years × 12 = 360 months.

Compare costs after (months)

Choose how long you think you will keep either loan before selling, paying it off or refinancing. We compare both loans at that same date and include the debt you still owe. Future refinancing is not promised.

5 years × 12 = 60 months.

My loan-payment limit ($, optional)

Enter the most you could pay each month for the loan itself: principal and interest. Taxes, insurance, mortgage insurance and HOA costs need separate room in your budget. This is a budget check, not lender approval.

Leave blank if you do not have a limit.

2. The two loan offers

Fixed interest rate (%)

Find Interest Rate on your fixed-loan offer. Do not enter APR. This rate stays the same in this model, so the loan payment stays the same until the last payment.

For 6.5%, enter 6.5.

ARM starting rate (%)

Find the starting interest rate on the adjustable-loan offer. This rate lasts only for the starting period entered below. It is not guaranteed for the full loan length.

For 5.5%, enter 5.5.

Fixed loan fees paid in cash ($)

Add nonrefundable closing fees and discount points, then subtract lender credits that pay those fees. Do not include down payment, escrow deposits, property taxes or insurance. Count each fee once. Financed fees are not modeled here.

Enter 0 only if there are no fees.

ARM fees paid in cash ($)

Use the adjustable offer’s nonrefundable fees and points minus applicable lender credits. Enter the net amount you pay in cash. Do not include the down payment or escrow deposits. For financed fees, use the separate offer tool.

Enter 0 only if there are no fees.

3. How the adjustable rate works

ARM starting period (months)

How long is the ARM rate fixed before it first changes? For a new 5/1 or 5/6 ARM, enter 60 months. This simulator starts at loan origination, not halfway through an existing ARM.

5 years × 12 = 60 months.

Months between rate changes

Check the ARM agreement. After the starting period, a 5/1 usually changes every year (12 months); a 5/6 changes every six months. The first number describes years, but the second number uses different conventions. Confirm the actual months with your lender.

5/1: enter 12. 5/6: enter 6.

Assumed index at first change (%)

The index is the moving part of an ARM rate, such as the contract’s SOFR-based index. Choose an assumed value for the first rate change. This is not the Fed rate or a mortgage quote. Ask which index and lookback date your agreement uses.

A guess for the scenario, not a forecast.

Lender’s added rate (margin, %)

The margin is the extra percentage points your lender adds to the index. Find it in the ARM agreement or ask your lender. It is normally set for the loan. Our example adds 2.5 points; that is an example, not a market offer.

Index 3.5 + margin 2.5 = 6%.

4. Rate limits and scenario assumptions — find these in the ARM agreement

These limits tell us how far your payment could move. Ask your lender if you cannot find them; guesses can change the results.

Use your agreement’s limits

First-change limit (points)

Find the initial adjustment cap in your agreement. It limits how many percentage points the first change can move. This model uses the same limit up and down. If your agreement has different limits, this tool does not fully match it.

A 2-point rise: 5.5% → at most 7.5%.

Later-change limit (points)

Find the subsequent adjustment cap. Each later rate change is limited relative to the previous rate. The first cap and this cap can be different. Enter percentage points, not a percent of the old rate.

A 2-point cap limits each later change.

Maximum rise over starting rate (points)

Find the lifetime cap and confirm the absolute maximum interest rate with the lender. Here, starting rate plus this number sets the ceiling. The maximum scenario moves up as fast as the first and later caps allow.

5.5% + 5 points = a 10.5% ceiling.

Lowest allowed ARM rate (%)

Find the minimum rate in the agreement. This is an absolute rate, not a drop amount. For example, a 2.5% floor means the modeled rate cannot go below 2.5%. Ask the lender rather than assuming it is zero.

Enter the actual rate floor.

Yearly index rise or fall (points)

This sets the speed of the rising and falling scenarios after the first rate change. If the starting index guess is 3.5%, a 0.5-point yearly change makes it 4% or 3% one year later. Rate caps still apply. It does not predict rates.

0.5 means half a point per year.

Your numbers stay in this browser. This tool does not save a watch or send notifications.

Could the smaller starting payment grow?

Enter both offers to compare the first payment, possible later payments and borrowing costs over the same time.

How this estimate works and what it leaves out

Interest is calculated monthly. At each ARM reset, the assumed index plus margin is limited by symmetric change caps, an absolute floor and the starting rate plus lifetime cap. The payment then repays the remaining balance over the months left. The maximum path jumps toward the ceiling at every reset; it is a stress test, not a prediction.

The steady path holds the index steady, not necessarily the loan rate. Falling and rising paths change the index linearly after the first reset, at the pace you enter. The index stops at 0% or 50%. Costs are interest plus net cash-paid loan fees. Payments made plus remaining debt plus fees minus the original borrowed amount give the same result. Full-term interest is a separate estimate assuming that scenario lasts.

No financed fees, cash-out, extra payments, daily interest, contract rate rounding/lookback, unused-change carryover, asymmetric caps, payment caps, interest-only periods, balloons, negative amortization, tax deductions or future refinancing are modeled. Check the actual agreement and the lender’s highest-payment disclosure. This is not APR, a lender quote, approval or a recommendation to choose either loan.

Read: Fixed vs. Adjustable Mortgage — Could Your Payment Rise? →

Comparing fixed-rate offers, points or financed fees? Use Compare Mortgage Offers →