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