ARM vs Fixed-Rate Mortgage Calculator

Compare an adjustable-rate mortgage to a fixed-rate mortgage over your planned hold period. See intro and post-adjustment payments and which option costs less in total.

Loan basics

Loan amount

Term (years)

Years you'll hold

Fixed-rate option

Fixed rate

ARM option

Intro rate

Intro years

Post-intro expected rate

Fixed

$2,661/mo

consistent payment for 30 years

Total over hold: $287,411

ARM intro

$2,463/mo

first 7 years

Then $2,857/mo at expected rate

ARM total over hold

$275,461

$11,950 less than fixed

Decision framework

You'll hold past the intro period, so you're exposed to 2 years at the post-intro rate. The ARM still wins here in this scenario, but rate movement could flip the answer.

ARMs typically price 0.25–0.75% below 30-year fixed. Use them when (a) your hold is short, (b) you can absorb the worst-case payment if rates rise, or (c) you have a clear refinance plan ahead of the adjustment.

How to Use

Enter the loan amount, total term, and the years you actually expect to keep the loan.
Enter the fixed rate quoted to you on the comparable fixed-rate product.
Enter the ARM intro rate, intro years (5/1, 7/1, 10/1), and your expected post-intro rate.
Read the side-by-side total cost. ARM wins clearly if the savings exceed the rate-rise risk you're willing to accept.

Frequently Asked Questions

When is an ARM the better choice?

ARMs win when (1) your hold horizon is shorter than the intro period, (2) you have flexibility to refinance or sell before the rate adjusts, or (3) you can absorb the worst-case payment without strain. They lose when long horizons combine with rising rates.

How conservative should the post-intro rate be?

Test multiple scenarios: today's index + margin (likely), today + 1% (conservative), and the lifetime cap (worst case). If you can't survive the lifetime cap payment without selling, the ARM is too risky for your situation.

Can I refinance an ARM into a fixed?

Yes, anytime — though closing costs apply. Many borrowers take an ARM with the explicit plan to refinance during the intro period, betting that rates will drop or that they'll move first.

How much does the ARM intro discount usually buy you?

Typically 0.25–0.75% lower than the comparable fixed. On a $400k loan that's $60–$180/mo savings during the intro period — material if you'll be in the loan only 5–7 years.