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A fixed rate mortgage has the same payment for the entire term of the loan. An adjustable rate mortgage (ARM) has a rate that can change, causing your monthly payment to increase or decrease. Use this calculator to compare a fixed rate mortgage to a Fully Amortizing ARM.
A fixed-rate mortgage has the same interest rate and monthly payment throughout the term of the mortgage.
This calculator shows a "fully amortizing" ARM, which is the most common type of ARM. The monthly payment is calculated to pay off the entire mortgage balance at the end of a 30-year term. After the initial period, the interest rate and monthly payment adjust at the frequency specified. The amount an ARM can adjust each year, and over the life of the loan, are typically capped. Below is a list of common ARMs.
| ARM Type | Months Fixed |
|---|---|
| 10/1 ARM | Fixed for 120 months, adjusts annually for the remaining term of the loan. |
| 7/1 ARM | Fixed for 84 months, adjusts annually for the remaining term of the loan. |
| 5/1 ARM | Fixed for 60 months, adjusts annually for the remaining term of the loan. |
| 3/1 ARM | Fixed for 36 months, adjusts annually for the remaining term of the loan. |
| 10/6 month ARM | Fixed for 120 months, adjusts every six months for the remaining term of the loan. |
| 7/6 month ARM | Fixed for 84 months, adjusts every six months for the remaining term of the loan. |
| 5/6 month ARM | Fixed for 60 months, adjusts every six months for the remaining term of the loan. |
| 3/6 month ARM | Fixed for 36 months, adjusts every six months for the remaining term of the loan. |
Saldo inicial o proyectado de su hipoteca.
El número de años durante los cuales se pagará este préstamo. Common fixed-rate mortgage terms are 15, 20 and 30 years.
The annual adjustment you expect in your ARM, after the initial period ends. The range for this calculator is minus 3% to plus 3%. Use a negative value if you believe interest rates will decrease, a positive value if you believe they will increase.
Annual interest rate for each mortgage type. Typically an ARM will have a lower initial interest rate than a fixed-rate mortgage. Tenga en cuenta que la tasa de interés es distinta de la Tasa de Porcentaje Anual (APR), que incluye otros costos como el seguro de la hipoteca, la tarifa de originación o puntos pagados al momento de originar la hipoteca. La APR suele ser superior a la tasa de interés nominal.
This is the number of months the rate is fixed for an ARM. During this period the interest rate and the monthly payment will remain fixed. The rate will then adjust annually by the amount entered in the "Expected Adjustment" field.
The number of payment periods between potential adjustments to your interest rate. The most common is 12 months, which means your payment could change at most once per year. Loans using the SOFR benchmark have six months between adjustments. The SOFR benchmark is based on what U.S. financial institutions pay each other for overnight loans. It is often used as a replacement for the LIBOR benchmark which is no longer used.
This is the highest allowable interest rate for your mortgage. Your interest rate can never be adjusted above this rate.
Monthly principal and interest payment (PI) for the fixed-rate mortgage and the fully amortizing ARM.