MCPCalc

ARM vs Fixed Calculator

Compare adjustable-rate vs fixed-rate mortgages over the life of the loan.

Scratchpad (not saved)

$

Total mortgage loan amount

%

Interest rate for the fixed-rate mortgage

%

Initial rate for the adjustable-rate mortgage

Initial fixed-rate period for the ARM

%

Expected rate after the ARM adjusts

Total loan term

What This Calculator Does

Compare adjustable-rate vs fixed-rate mortgages over the life of the loan.

It combines Loan Amount, Fixed Rate, ARM Initial Rate, ARM Fixed Period to estimate Cheaper Option, Fixed Monthly Payment, Fixed Total Interest.

Formula & Method

Core equations: Both loan types use the amortization formula: M = P \cdot \frac{r(1+r)^n}{(1+r)^n - 1} For the ARM, the payment is recalculated after the fixed period using the remaining balance and adjusted rate. Total savings: S = (M_{fixed} \times n_{fixed}) - (M_{ARM,1} \times n_1 + M_{ARM,2} \times n_2) Inputs are applied in base units, then derived metrics are computed from the same equations and rounded for display.

Notation used in the formulas: R = Cheaper Option; x_{1} = Loan Amount; x_{2} = Fixed Rate; x_{3} = ARM Initial Rate; x_{4} = ARM Fixed Period; x_{5} = Expected Adjusted Rate; x_{6} = Loan Term.

Method summary: inputs are normalized to consistent units, core equations are evaluated, then secondary values are derived and rounded for display.

Use this calculator for quick scenario analysis. Start with baseline values, change one driver at a time, and compare how sensitive the results are to each input shown above.

Inputs Used

  • Loan Amount: Total mortgage loan amount
  • Fixed Rate: Interest rate for the fixed-rate mortgage
  • ARM Initial Rate: Initial rate for the adjustable-rate mortgage
  • ARM Fixed Period: Initial fixed-rate period for the ARM
  • Expected Adjusted Rate: Expected rate after the ARM adjusts
  • Loan Term: Total loan term

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