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ARM vs. Fixed Calculator
See how an adjustable-rate mortgage compares to a fixed rate over 30 years, payment by payment, year by year.
Loan Details
Payment Summary
ARM Initial Payment
$2,334/mo
Fixed Payment
$2,581/mo
ARM Total Interest
$791,673
Fixed Total Interest
$529,200
Year-by-Year Comparison
| Year | ARM Rate | ARM Payment | Fixed Payment | Difference |
|---|---|---|---|---|
| 1 | 5.75% | $2,334 | $2,581 | -$247 |
| 2 | 5.75% | $2,334 | $2,581 | -$247 |
| 3 | 5.75% | $2,334 | $2,581 | -$247 |
| 4 | 5.75% | $2,334 | $2,581 | -$247 |
| 5 | 5.75% | $2,334 | $2,581 | -$247 |
| 6 | 7.75% | $2,803 | $2,581 | +$222 |
| 7 | 9.75% | $3,294 | $2,581 | +$713 |
| 8 | 10.75% | $3,545 | $2,581 | +$964 |
| 9 | 10.75% | $3,545 | $2,581 | +$964 |
| 10 | 10.75% | $3,545 | $2,581 | +$964 |
| 11 | 10.75% | $3,545 | $2,581 | +$964 |
| 12 | 10.75% | $3,545 | $2,581 | +$964 |
| 13 | 10.75% | $3,545 | $2,581 | +$964 |
| 14 | 10.75% | $3,545 | $2,581 | +$964 |
| 15 | 10.75% | $3,545 | $2,581 | +$964 |
| 16 | 10.75% | $3,545 | $2,581 | +$964 |
| 17 | 10.75% | $3,545 | $2,581 | +$964 |
| 18 | 10.75% | $3,545 | $2,581 | +$964 |
| 19 | 10.75% | $3,545 | $2,581 | +$964 |
| 20 | 10.75% | $3,545 | $2,581 | +$964 |
| 21 | 10.75% | $3,545 | $2,581 | +$964 |
| 22 | 10.75% | $3,545 | $2,581 | +$964 |
| 23 | 10.75% | $3,545 | $2,581 | +$964 |
| 24 | 10.75% | $3,545 | $2,581 | +$964 |
| 25 | 10.75% | $3,545 | $2,581 | +$964 |
| 26 | 10.75% | $3,545 | $2,581 | +$964 |
| 27 | 10.75% | $3,545 | $2,581 | +$964 |
| 28 | 10.75% | $3,545 | $2,581 | +$964 |
| 29 | 10.75% | $3,545 | $2,581 | +$964 |
| 30 | 10.75% | $3,545 | $2,581 | +$964 |
Gold line marks first adjustment year. ARM assumes maximum adjustment cap each year after initial period.
Not Sure Which to Choose?
Talk to a Lender
A local mortgage professional can help you weigh the risk/reward of an ARM vs. fixed.
ARM vs. Fixed Facts
When ARMs make sense
If you plan to sell or refinance before the initial period ends, an ARM's lower rate can save thousands.
The risk of ARMs
After the initial period, your rate adjusts annually. Worst-case: your rate climbs to initial rate + lifetime cap.
5/1, 7/1, 10/1 explained
The first number is the fixed period (years); the second is how often it adjusts after that (every 1 year).
How the ARM vs. fixed comparison works
This tool amortizes a fixed-rate loan and an adjustable-rate loan side by side, year by year. Both use the standard payment formula M = P[r(1+r)^n] / [(1+r)^n-1]. The ARM holds its lower intro rate for the fixed period (the 7 in a 7/6 ARM), then the calculator recomputes the payment on the remaining balance at each assumed adjustment so you can compare the two paths.
On a $450,000 loan, a 30-year fixed at 7.00% costs about $2,994 a month. A 7/6 ARM starting at 6.00% costs roughly $2,698, saving around $296 a month, close to $3,550 a year, during the intro period. After year 7 the ARM rate can rise, so later years may cost more than the fixed loan depending on caps and index moves.
ARMs can suit South Florida buyers who expect to sell or refinance before the fixed period ends, which is common given job relocations and second-home turnover here. But weigh the reset risk against already-heavy insurance and HOA costs. If a future rate jump plus rising premiums would strain the budget, the certainty of a fixed payment is often worth the higher starting rate.