A Fully Amortizing ARM could save you SAVINGS_ARM_MONTH per month. An Interest Only ARM could save you as much as SAVINGS_IO_MONTH per month.

A LOAN_AMOUNT Fixed Rate Mortgage with a term of TERM years at INTEREST_RATE0 has a monthly payment of MONTHLY_PI0. If you were to finance this mortgage with a Fully Amortizing ARM at INTEREST_RATE1 the monthly payment would be MONTHLY_PI1, saving you SAVINGS_ARM_MONTH per month. An Interest Only ARM at INTEREST_RATE2 has a MONTHLY_PI2 monthly payment. This could save your SAVINGS_IO_MONTH per month over a Fixed Rate Mortgage.

ARM vs. Fixed Rate Mortgage
&NBSP;	Fully Amortizing ARM	Interest Only ARM
Initial savings on monthly payment	SAVINGS_ARM_MONTH	SAVINGS_IO_MONTH
Payment savings first year	SAVINGS_ARM_FIRST_YEAR	SAVINGS_IO_FIRST_YEAR
Payment savings for five years	SAVINGS_ARM_FIVE_YEAR	SAVINGS_IO_FIVE_YEAR
BREAK_EVEN_NOTE* *This only applies to the Fully Amortizing ARM vs. Fixed Rate Mortgage.

&NBSP;	Fixed Rate Mortgage	Fully Amortizing ARM	Interest Only ARM
Results Summary
Loan amount	LOAN_AMOUNT	LOAN_AMOUNT	LOAN_AMOUNT
Term	TERM years	TERM years	TERM years
Interest rate	INTEREST_RATE0 Fixed for TERM years.	INTEREST_RATE1 Rate is fixed for ADJUSTABLE_MONTHS_FIXED1 months and then is adjusted by ADJUSTABLE_RATE_INCR1 every ADJUSTABLE_RATE_FEQ1 months, up to a maximum of ADJUSTABLE_RATE_CAP1. The highest rate actually charged was HIGHEST_RATE1.	INTEREST_RATE2 Rate is fixed for ADJUSTABLE_MONTHS_FIXED2 months and then is adjusted by ADJUSTABLE_RATE_INCR2 every ADJUSTABLE_RATE_FEQ2 months, up to a maximum of ADJUSTABLE_RATE_CAP2. The highest rate actually charged was HIGHEST_RATE2.
Initial monthly payment	MONTHLY_PI0	MONTHLY_PI1	MONTHLY_PI2
First year totals:
&NBSP;&NBSP;Interest &NBSP;&NBSP;Principal &NBSP;&NBSP;Payments	FIRST_YEAR_INTEREST0 FIRST_YEAR_PRINCIPAL0 FIRST_YEAR_TOTAL0	FIRST_YEAR_INTEREST1 FIRST_YEAR_PRINCIPAL1 FIRST_YEAR_TOTAL1	FIRST_YEAR_INTEREST2 FIRST_YEAR_PRINCIPAL2 FIRST_YEAR_TOTAL2
Five year totals:
&NBSP;&NBSP;Interest &NBSP;&NBSP;Principal &NBSP;&NBSP;Payments	FIVE_YEAR_INTEREST0 FIVE_YEAR_PRINCIPAL0 FIVE_YEAR_TOTAL0	FIVE_YEAR_INTEREST1 FIVE_YEAR_PRINCIPAL1 FIVE_YEAR_TOTAL1	FIVE_YEAR_INTEREST2 FIVE_YEAR_PRINCIPAL2 FIVE_YEAR_TOTAL2
Total interest	TOTAL_INTEREST0	TOTAL_INTEREST1	TOTAL_INTEREST2
Total payments	TOTAL_PAYMENTS0	TOTAL_PAYMENTS1	TOTAL_PAYMENTS2
Ending balance	ENDING_BALANCE0	ENDING_BALANCE1	ENDING_BALANCE2

Payment schedule

**REPEATING GROUP**

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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.