Fixed Total Interest
$382,633.47
Fixed vs Adjustable Rate Calculator
Compare total cost of a fixed-rate loan vs. an ARM over the comparison horizon.
Total Cost Difference (Fixed − ARM)
-$34,516.69
ARM Total Interest
$417,150.15
Fixed Payment
$1,896.20
ARM Initial Payment
$1,703.37
How to use the Fixed vs Adjustable Rate Calculator
The Fixed vs Adjustable Rate Calculator is free and runs entirely in your browser — no sign-up, and nothing you enter leaves your device. It opens pre-filled with a realistic example, so you can see how it works before replacing any figure with your own; the results update as you type. Press Calculate to refresh the result panel, or Reset to return to the example.
The inputs it asks for:
- Loan Amount — a dollar amount.
- Fixed Rate — a percentage (enter 6 for 6%).
- ARM Initial Rate — a percentage (enter 6 for 6%).
- ARM Initial Period (yrs) — a number.
- ARM Rate After Adjustment — a percentage (enter 6 for 6%).
- Term (Years) — a number.
The formula
It amortizes the fixed loan straight through, and builds the ARM in two phases — the intro rate for the fixed period, then the remaining balance re-amortized at the adjusted rate — and compares total interest across both:
Difference = Total paid (fixed) − Total paid (ARM)- Total paid (fixed)
- principal + all interest at the fixed rate over the term
- Total paid (ARM)
- principal + intro-period interest + interest on the reset balance at the adjusted rate
It assumes exactly one adjustment, to the rate you enter, held for the rest of the term. If rates rise more (or less) than that single assumption, the comparison changes — the ARM's cost is only as good as your rate guess.
Worked example
Using the example values — Loan Amount $300,000.00, Fixed Rate 6.5%, ARM Initial Rate 5.5%, ARM Initial Period (yrs) 5, ARM Rate After Adjustment 7.5%, Term (Years) 30 — the Fixed vs Adjustable Rate Calculator returns a Total Cost Difference (Fixed − ARM) of -$34,516.69. It also reports Fixed Total Interest ($382,633.47), ARM Total Interest ($417,150.15), Fixed Payment ($1,896.20).
Prefer your own numbers? Change any field above and this recomputes instantly.
Key terms
- Fixed-rate mortgage
- One rate for the entire term; the payment never changes.
- ARM
- A lower intro rate that later adjusts, trading certainty for a cheaper start.
- Total interest
- The figure to compare — the true lifetime cost of each loan.
Frequently asked questions
Which is cheaper?
It depends entirely on the adjusted rate you assume. At the intro rate the ARM starts cheaper; if it resets much higher, the fixed loan can win over the full term.
Is a positive difference good for the ARM?
The result is fixed total minus ARM total, so a positive number means the ARM costs less under your assumptions. Change the adjusted rate to see how fragile that is.
What's the safe choice?
A fixed rate removes the rate risk entirely, at the cost of a higher starting rate. An ARM bets that you'll move or refinance early, or that rates stay tame.