Welcome > Resources > Mortgage Calculators > Fixed or Adjustable Rate ...

Fixed or Adjustable Rate?

A fixed rate mortgage has the same payment for the entire term of the loan. An adjustable rate mortgage (ARM) has a rate that can change, causing your monthly payment to increase or decrease. Use this calculator to compare a fixed rate mortgage to two types of ARMs, a Fully Amortizing ARM and an Interest Only ARM.

Definitions

Fixed Rate Mortgage

A fixed rate mortgage has the same interest rate and monthly payment throughout the term of the mortgage. The payment is calculated to payoff the mortgage balance at the end of the term. The most common terms are 15 year and 30 years.

Fully Amortizing ARM

This is the most common type of ARM. The monthly payment is calculated to payoff the entire mortgage balance at the end of the term. The term is typically 30 years. After any fixed interest rate period has passed, the interest rate and payment adjusts annually. A Fully Amortizing ARM will also have a maximum rate that it will not exceed. This calculator uses a maximum interest rate of 12%. Below is a list of the most common types of Fully Amortizing ARMs.

Common Adjustable Rate Mortgages
ARM Type	Months Fixed
10/1 ARM	Fixed for 120 months, adjusts annually for the remaining term of the loan.
7/1 ARM	Fixed for 84 months, adjusts annually for the remaining term of the loan.
5/1 ARM	Fixed for 60 months, adjusts annually for the remaining term of the loan.
3/1 ARM	Fixed for 36 months, adjusts annually for the remaining term of the loan.
1 year ARM	Fixed for 12 months, adjusts annually for the remaining term of the loan.

Interest Only ARM

An Interest Only ARM only requires monthly interest payments. Since you are not paying any principal, as you are with the other two types of mortgages described above, this can lower your monthly payment. However, since your mortgage's principal balance is not decreased, you will have a balloon payment at the end of the mortgage's term. Like a Fully Amortizing ARM, an Interest Only ARM will often have a period where the interest rate is fixed, and then it is adjusted annually. An Interest Only ARM will also have a maximum interest rate that it will not exceed. This calculator uses a maximum interest rate of 12%.

Mortgage amount

Expected balance for your mortgage.

Term in years

The number of years over which you will repay this mortgage. The most common mortgage terms are 15 years and 30 years. Please note that for the Interest Only ARM you will have a balloon payment for the entire principal balance at the end of the loan term.

Expected rate change

The annual adjustment you expect in your ARM. The range for this calculator is minus 3% to plus 3%. Use a negative value if you believe interest rates will decrease, a positive value if you believe they will increase.

Interest rate

Annual interest rate for each mortgage type. Typically an ARM will have a lower interest rate than a fixed rate mortgage. The rate of an Interest Only ARM will vary by lender.

Months rate fixed

This is the number of months the rate is fixed for an ARM. During this period the interest rate and the monthly payment will remain fixed. The rate will then adjust annually by the expected rate change.

Interest rate cap

This is the maximum interest rate for this mortgage. The mortgage's interest rate will never exceed the interest rate cap.

Monthly payment

Monthly principal and interest payment (PI) for the Fixed Rate Mortgage and the Fully Amortizing ARM. This is an interest only payment for an Interest Only ARM.

The mortgage calculators are provided by KJE Computer Solutions, LLC and made available to NUMBER1EXPERT as self-help tools for your independent use and are not intended to provide investment advice. We can't guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

"A model of how the Internet can facilitate the process of deciding where to send your children to school" - America's Best School Profiles by The Heritage Foundation Texas Public, Private and Charter Schools: Compare them using these top-rated, comprehensive reports.   Schools in Georgetown, Round Rock and Austin

Time to Move >Remodel Or Move At some point your present home may begin to feel cramped. You would like enough room to have an "adult haven", but you must weigh the price of a larger home over against the prospect of living with contractors and plaster dust for a long time. Is it better to remodel or to look for a new home? Before you decide on a major home improvement project, talk with a real estate agent who knows your neighborhood. Will the changes you have in mind over-improve your home, making it difficult to re-sell? Will you be able to recover the cost of your investment? Find out how much your present home is currently worth, and how much home equity you have. You may be able to make a substantial down payment that lowers your mortgage payments on a larger home. It may be worth making a move to avoid the stress and inconvenience of remodeling, if you can find a new home with all the features you would like to add to your present home. See All Tips In The "Time to Move" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

Q  What is the world's longest frontier? A  At 3,987 kilometers (3,987 miles), the border between Canada and the U.S. is the longest in the world. See More Real Estate Trivia >

Lena Lansdale's Team Moreland Properties 823 South Austin Ave. Georgetown, TX. 78626 Phone: 512-818-0229 Fax: 512-863-2116 Email: lenalansdale@NUMBER1EXPERT.com Lena Lansdale has been a resident of Georgetown, Texas for 33 years and knows the Georgetown, Round Rock, and Austin, Texas Real Estate Market well. She has also been a Top Producer for 9 consecutive years and is truly a NUMBER1EXPERT. Lena's success in real estate is because she loves people and is enthusiastic and full of energy. Lena has put the fun back into buying and selling real estate. People enjoy being around Lena and she makes everyone feel comfortable and a part of the community. Lena and her husband, Larry Black have put together a proven professional real estate team, providing exceptional service

LARRY BLACK Phone: 512-818-0316 Fax: 512-863-2116 Email: LarryBlack@Moreland.com www.LenaLansdale.com is brought to you by Lena Lansdale's Team NUMBER1EXPERT™ in real estate for Georgetown, Round Rock and Austin, Texas Read Lena Lansdale's Team's Privacy Guarantee, Terms of Service, and Free & Without Obligation Pledge

NUMBER1EXPERT™
© Best Image Marketing and/or its clients.
All rights reserved. All information deemed reliable but not guaranteed.