Learn / Fixed vs Adjustable Rate
Fixed vs Adjustable Rate
A fixed-rate mortgage keeps the same rate for the whole term. An adjustable-rate mortgage (ARM) starts lower, then can change on a schedule.
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Fixed-rate mortgages
The rate and the principal-and-interest payment stay the same for the life of the loan. This gives predictable payments and is the most popular choice.
Adjustable-rate mortgages
An ARM offers a lower fixed rate for an intro period, such as the 7 years in a 7/6 ARM, then adjusts periodically based on an index plus a margin. Caps limit how much the rate can move at each adjustment and over the life of the loan.
Who each fits
A fixed rate fits buyers who want certainty or plan to stay long term. An ARM can fit buyers who expect to move or refinance before the fixed period ends, or who want a lower starting payment and accept the risk of later adjustments.
Put it into numbers. The calculator estimates your payment and compares every loan type.
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Frequently asked questions
Is a fixed or adjustable mortgage better?
Fixed gives certainty; an ARM offers a lower start with future adjustment risk. It depends on how long you will keep the loan.
What is a 7/6 ARM?
A loan fixed for 7 years, then adjustable every 6 months based on an index plus a margin, within caps.
Can an ARM payment go up a lot?
It can rise at each adjustment, but rate caps limit how much it moves per period and overall.
Important disclosures. LoanFitCalc is a free educational tool that provides estimates only. It is not a loan, a loan approval, a commitment to lend, a rate lock, or an offer to make a loan, and it does not provide financial, legal, or tax advice or recommend a specific loan for you. Mortgage insurance rates, funding and guarantee fees, loan limits, taxes, and insurance figures are typical published values used for estimation and are subject to change. Program eligibility rules are summarized and simplified. Actual terms depend on your full application, credit, property, and lender underwriting. Consult a licensed mortgage loan originator before making any decision. LoanFitCalc is an independent educational website and is not a lender. ⌂ Equal Housing Opportunity
