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Which is Better: Fixed or Adjustable-Rate Mortgage?

The decision to choose between a fixed and an adjustable-rate mortgage include factors such as loan duration, the index used by the lender, the number and timing of rate adjustments, and your assumption about the increase/decrease of future interest rates. Use this fixed rate mortgage vs. adjustable rate mortgage calculator to help compare the total cost of each alternative.

Mortgage Alternatives and Assumptions

Loan amount $
  Fixed-Rate Loan Adjustable-Rate Loan
(Initial) annual interest rate: (0-30) % (0-30) %
Number of years (1-40) (1-40)

Index Rate Detail

Current index rate: (0-30) %
Lenders margin added to index rate: (0-30) %
Index rate adjustment: (0-2) %
Number of months between index rate adjustments (1-480)
What will rates be doing over the life of the loan: stay same, increase or decrease?
Assumed maximum annual rate adjustment: (0-2) %

Adjustable Rate Detail

Absolute minimum rate over term of loan: (0-30) %
Absolute maximum rate over term of loan: (0-30) %
Number of months before first rate adjustments (1-360)
Number of months between rate adjustments (1-480)

Comparison Assumptions

Comparison options/cost of money: % (0-30)
Marginal tax bracket: (0-50) %
Years to compare total costs: (1-30)
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This calculator is provided by Financial Calculators, Inc., and is intended solely for general information and education purposes. You should not take any action on the basis of the information provided through this calculator. Please see the disclaimer for further information and limitations.

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