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: 
The information provided here is to assist you in planning for your future. Any analysis is a result of the information you have provided. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.

Any rate of return entered into the interactive calculator to project future values should be a reasonable average return for the period. Rates of return will vary over time, and generally the higher the rate of return the higher the degree of risk.

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