Mortgage Calculators

ARM vs. Fixed Rate Mortgage

Use this calculator to compare a fixed rate mortgage to a Fully Amortizing ARM.

Inputs

Loan amount

Loan term (years)

ARM initial rate

Fixed rate

ARM fixed period (years)

ARM rate after reset

Estimates only. Adjust any value to recalculate instantly.

Results

Saved during the ARM intro period $15,515 $258.59/mo lower for 5 years

ARM initial payment $1,816.92

ARM payment after reset $2,186.48 at 7.50%

Fixed payment $2,075.51

ARM lifetime interest $444,960 vs $427,185 fixed

Initial payment compared

ARM payment $1.8k
Fixed premium $259

Loan balance ARMFixed

The ARM saves $15,515 over its 5-year intro period, but at 7.50% after reset its payment becomes $2,186.48 and lifetime interest runs $17,775 higher than the fixed loan. An ARM suits buyers who expect to move or refinance before the reset; a fixed rate buys certainty.

Balance & cumulative interest by year (ARM resets at year 5)View table

Year	ARM balance	Fixed balance	ARM interest	Fixed interest
1	$315,689	$316,590	$17,492	$21,496
2	$311,135	$312,942	$34,742	$42,754
3	$306,325	$309,040	$51,734	$63,758
4	$301,243	$304,866	$68,455	$84,491
5	$295,874	$300,402	$84,889	$104,933
6	$291,685	$295,627	$106,938	$125,064
7	$287,170	$290,520	$128,661	$144,863
8	$282,305	$285,057	$150,034	$164,306
9	$277,062	$279,213	$171,029	$183,369
10	$271,413	$272,963	$191,617	$202,025
11	$265,324	$266,278	$211,767	$220,246
12	$258,763	$259,127	$231,443	$238,001
13	$251,693	$251,478	$250,611	$255,258
14	$244,074	$243,296	$269,230	$271,983
15	$235,863	$234,545	$287,257	$288,138
16	$227,015	$225,185	$304,646	$303,684
17	$217,480	$215,173	$321,349	$318,578
18	$207,205	$204,463	$337,312	$332,774
19	$196,132	$193,008	$352,477	$346,226
20	$184,200	$180,756	$366,782	$358,879
21	$171,341	$167,650	$380,161	$370,680
22	$157,484	$153,632	$392,541	$381,568
23	$142,551	$138,638	$403,846	$391,480
24	$126,459	$122,600	$413,992	$400,348
25	$109,117	$105,445	$422,888	$408,099
26	$90,429	$87,095	$430,438	$414,655
27	$70,291	$67,468	$436,538	$419,935
28	$48,589	$46,474	$441,074	$423,847
29	$25,202	$24,019	$443,925	$426,298
30	$0	$0	$444,960	$427,185

How the arm vs. fixed rate mortgage calculator works

It amortizes the same loan at the ARM’s lower initial rate and at the fixed rate, then multiplies the monthly difference by the ARM’s fixed period to show how much you save before any reset.

Worked example

Worked example: with loan amount of $320,000, loan term (years) of 30 and arm initial rate of 5.50%, the arm vs fixed rate mortgage calculator shows saved during the arm intro period of $15,515.

ARM initial payment: $1,816.92
ARM payment after reset: $2,186.48
Fixed payment: $2,075.51
ARM lifetime interest: $444,960

The formula

Each loan: payment = P × r ÷ (1 − (1 + r)⁻ⁿ). Intro saving = (fixed payment − ARM payment) × fixed-period months.

Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.

Frequently asked

Questions about the arm vs. fixed rate mortgage

Should I choose an ARM or a fixed-rate mortgage?

An ARM saves money up front and suits buyers planning to move or refinance before it resets. A fixed rate costs more initially but never changes — certainty many buyers prefer.

How much does an ARM really save?

It depends on the rate gap and the fixed period. The calculator totals the saving over the intro years, which you weigh against the risk of a higher payment later.

What happens when the fixed period ends?

The rate adjusts to a market index plus a margin and can rise. If you still hold the loan, your payment changes — possibly above what the fixed option would have been.

Is the ARM vs. Fixed Rate Mortgage free to use?

Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.

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