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 Loan (0% to 40%)	Adjustable-Rate Loan (0% to 40%)
(Initial) annual interest rate
Number of years

Index Rate Detail

Current index rate (0% to 40%)

Lenders margin added to index rate (0% to 40%)

Index rate adjustment (0% to 200%)

Number of months between index rate adjustments (1 to 480)

What will rates be doing over the life of the loan: stay same, increase or decrease?Stay the sameIncreasingDecreasing

Assumed maximum annual rate adjustment (0% to 200%)

Adjustable Rate Detail

Absolute minimum rate over term of loan (0% to 40%)

Absolute maximum rate over term of loan (0% to 40%)

Number of months before first rate adjustments (1 to 360)

Number of months between rate adjustments (1 to 480)

Comparison Assumptions

Comparison options/cost of moneyCost only (0%)Inflation (3.5%)Specify (below)

(0% to 40%)

Marginal tax bracket (0% to 75%)

Years to compare total costs: (1 to 40)

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