Fixed Versus Adjustable Calculator The Fixed Versus Adjustable Calculator will help you determine whether you should choose a fixed rate loan or an adjustable rate loan. The interest rate for a fixed rate loan stays the same for the life of the loan. With an adjustable rate mortgage (ARM), however, the interest rate fluctuates periodically based on an index such the U.S. Treasury Security Yields (1 Year T Bill), the Cost of Funds Index (COFI) or the London Inter-Bank Offer Rate (LIBOR). ARMs are attractive to home buyers because they generally offer a lower initial interest rate than a fixed rate mortgage, saving you more money up front. They also can save you more in the long term provided interest rates remain stagnate or decrease. And often, home buyers choose an ARM because they can qualify for a larger loan amount. But for all these benefits there is a tradeoff - risk. When comparing fixed versus adjustable, it is important to look at the index your interest rate will be measured against, as well as the historical and predicted growth or reduction of this index. Margins are also an important factor, especially when comparing loans between lenders.
Enter the approximate loan amount and loan term values by clicking on and dragging the black diamond-shaped sliders left or right. Enter exact numbers by clicking on the figure in the box on the right and typing in your number (without commas) in the box. Windows XP Users: If the calculator above does not appear you may need to install the free Java plug-in available here. | 
