Home Mortgage

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 Adjustable-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 money: (%) help
Marginal tax bracket: (%) help
Years to compare total costs
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This information may help you analyze your financial planning needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. This service shall not infer that company assumes any fiduciary duties. In addition, such service should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.