Which is better: Fixed or adjustable-rate mortgage?

It is a difficult decision to decide between a fixed and an adjustable-rate mortgage. 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 all have an impact. Use this calculator to help compare the total cost of each alternative.
Mortgage Alternatives and Assumptions
Loan amount ($) 
Fixed-Rate LoanAdjustable-Rate Loan
(Initial) annual interest rate
Number of years
Index Rate Detail
Current index rate (%)help
Lenders margin added to index rate (%)help
Index rate adjustment (%)help
Number of months between index rate adjustments 
What will rates be doing over the life of the loan: stay same, increase or decrease? 
Assumed maximum annual rate adjustment (%) 
Adjustable Rate Detail
Absolute minimum rate over term of loan (%) 
Absolute maximum rate over term of loan (%) 
Number of months before first rate adjustments 
Number of months between rate adjustments 
Comparison Assumptions
Comparison options/cost of moneyhelp
(%) 
Marginal tax bracket (%)help
Years to compare total costs: 
   
All calculators and tools are supplied as a courtesy only. FHB is not responsible for the accuracy or completeness of information that you provide or information generated by the calculators. Please check your records carefully before inputting your information into the calculators or tools. All projected rates and results are estimates, are examples only, and are necessarily hypothetical in nature. No results are guaranteed. The output of the tools and calculators may vary with each use and over time. The output and results should not be construed as financial, legal or tax advice, and the calculators and tools are not intended to replace the advice of qualified professionals. You should not rely on the calculators and tools as your only source of information. You should consult with a qualified professional of your choice whenever specific advice is necessary or appropriate.

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