ARM vs Fixed Rate Mortgage Calculator
An ARM carries two prices — the one advertised and the one the caps allow. Look at both.
What This Calculator Does
Places an adjustable rate mortgage next to a fixed rate loan over the same term: the payment through the intro period, the payment after the first adjustment, and the worst case the initial, periodic, and lifetime caps permit — so the comparison is against the ceiling rather than the teaser.
Who Is This For
Buyers handed an ARM priced below their fixed quote, owners intending to sell or refinance before the first adjustment, and anyone in Miami who wants to know what happens if they still hold the loan when it moves.
How It Works
Provide the loan amount, the ARM's intro rate, the length of its fixed period, its three caps, and the fixed rate you were quoted. Both payment paths appear, along with the highest payment the ARM can ever reach.
Frequently Asked Questions
What do ARM caps limit?
Three separate ceilings. The initial cap governs the first adjustment, the periodic cap governs each one after that, and the lifetime cap fixes the highest rate the loan can ever carry. Together they define your worst case, and the lender must disclose all three before you sign.
Can I qualify on the intro rate?
You should not. Qualify on the worst-case payment instead. The intro rate is temporary by design, and a budget that only holds while it lasts is a budget relying on selling, refinancing, or a rate move that nobody controls.
When is an ARM the right call?
When your horizon is genuinely shorter than the fixed period — a known relocation, a property you mean to sell, a bridge to a different financial position. Where the plan is to hold indefinitely, the fixed loan removes the one variable you cannot manage.
How does an ARM compare with fixed rates today?
Benchmark 30-year fixed rates have run near 6.6-6.7% in mid-2026, and ARMs are typically priced below that during the intro period. The calculator values that discount over the years you actually keep the loan rather than over the full term.
What if refinancing is not available later?
That is precisely the risk the caps exist to bound. Refinancing depends on rates, your credit, and the property's appraised value at a future moment, none of which are promised. Read the worst-case column as though refinancing did not exist, and decide from there.