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 LoanAdjustable-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 moneyhelp
(%) 
Marginal tax bracket (%)help
Years to compare total costs: 
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This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. This service shall not infer that the company or its affiliates and email service provider, DocuMatix, LLC, 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. Use of service is provided without warranty of any kind, either express, implied or statutory, including FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, AND ACCURACY. Use of service is entirely at users own risk and user should seek professional financial and legal advice without reliance on service. Provider and email service provider shall not be liable for any lost profits, lost business, direct or indirect, punitive or consequential damages or damages of any kind arising out of service use. This agreement shall be governed and enforced by Utah law, with courts located in Salt Lake County, Utah the sole and exclusive venue. User agrees to indemnify and hold harmless company, email service provider, and affiliates from any and all liabilities and costs (including attorney fees) for any improper use or violation of these terms.

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