mCalculator logo
Mortgage Calculators

ARM vs Fixed Mortgage Calculator

Compare an adjustable-rate mortgage against a fixed-rate mortgage, factoring in the ARM's post-adjustment rate.

Simulates the ARM month by month: initial rate for the fixed period, then a re-amortization at the adjusted rate.

Fixed-rate
$
%
yr
ARM
%
yr
%
yr
Fixed costs less in interest
$52,485
Assuming the ARM adjusts to 7.5% after 5 years.
Fixed monthly
$2,528
ARM initial monthly
$2,334
ARM adjusted monthly
$2,742
Fixed total interest
$510,178
ARM total interest
$562,663
Difference (ARM − Fixed)
+$52,485
Overview

How the ARM vs Fixed Calculator Works

ARMs offer lower initial payments but expose you to rate risk after the initial fixed period. This calculator lets you enter both the teaser rate and a realistic adjusted rate, then simulates the ARM month by month against a fully-amortizing fixed loan.

Formula

The Math Behind the Calculator

Fixed: standard amortization at one rate. ARM: amortize at the initial rate for the fixed period, then re-amortize the remaining balance at the adjusted rate over the remaining term.

Example

A Worked Example

$400,000 loan. Fixed 30-yr at 6.5%: $2,528/mo, $510,178 total interest. 5/1 ARM at 5.75% initial then 7.5% adjusted: initial payment $2,334, adjusted ~$2,689, total interest ~$531,000. The ARM saves $194/month for 5 years, then costs more.

How to use

How to Use the ARM vs Fixed Calculator

  1. 1Enter the loan amount.
  2. 2Enter the fixed-rate mortgage rate and term.
  3. 3Enter the ARM's initial (teaser) rate, initial fixed period (e.g. 5 for a 5/1 ARM), and a realistic adjusted rate.
Interpretation

What the Results Mean

  • Fixed total interest is a known number for the life of the loan.
  • ARM total interest depends on the adjusted rate — if it's higher, so is total interest.
  • The comparison is fair only if you enter a realistic (not best-case) adjusted rate.
Avoid

Common Mistakes to Avoid

  • Assuming the ARM stays at the teaser rate forever — it won't.
  • Not planning to refinance or sell before the reset; if rates spike, you're stuck.
  • Ignoring rate caps in the ARM contract — periodic and lifetime caps limit how high it can go.
Keep going

Related Calculators

Mortgage Payment Calculator

Estimate your monthly mortgage payment including principal, interest, property taxes, insurance, HOA, and PMI.

Mortgage Affordability Calculator

See the maximum home price you can responsibly afford based on income, debts, down payment, and current rates.

Mortgage Refinance Calculator

Calculate monthly savings, break-even point, and lifetime interest if you refinance your mortgage.

Extra Mortgage Payment Calculator

Mortgage calculator with extra payments to principal — see how much interest and time you save by adding an extra monthly principal payment.

FAQ

Frequently Asked Questions

When does an ARM make sense?+

When you plan to sell or refinance before the fixed period ends, or when initial rates are meaningfully lower and rates are expected to fall.

What is a 5/1 ARM?+

Fixed for 5 years, then adjusts once per year for the remaining term.

How high can the ARM rate go?+

Contract caps limit it — typically 2% per adjustment and 5% over the loan's life above the initial rate.

Financial Disclaimer

This calculator is for educational and estimation purposes only. It does not provide financial, mortgage, tax, investment, or legal advice. Actual rates, payments, taxes, fees, insurance costs, eligibility, and loan terms vary by lender, location, credit profile, and market conditions. Always compare official offers and consult a qualified professional before making financial decisions.

Last updated June 2026 · Prepared by the mCalculator Editorial Team