US ARM vs. Fixed Rate Mortgage Calculator
Compare initial teaser rate savings of 5/1 and 7/1 ARMs against 30-year fixed loans, model lifetime caps, and find your breakeven crossover.
Compare initial teaser rate savings of 5/1 and 7/1 ARMs against 30-year fixed loans, model lifetime caps, and find your breakeven crossover.
Compare initial teaser rate savings of 5/1 and 7/1 ARMs against 30-year fixed loans, model lifetime caps, and find your breakeven crossover. Calculate exact, penny-accurate projections compliant with 2026 IRS • St. Louis FED (FRED) standards using Calconova's deterministic IEEE-754 (Decimal.js) calculation engine with instant breakdowns.
Borrowing amount, 30-year fixed rate, and ARM adjustment terms
Maximum rate ceiling: 10.75% (Worst-Case Monthly: $3,569.83)
If you plan to sell or refinance before year 11.2, the ARM puts you ahead by up to $15,606.06 in net cash savings.
Guaranteed cumulative savings across 5 years ($260.1/month)
ARM Initial Payment
$2,334.29
30-Yr Fixed Payment
$2,594.39
ARM Reset Payment
$2,802.64
Worst-Case Ceiling
$3,569.83
Breakeven Horizon = Teaser Years + [ Cumulative Teaser Savings ÷ (Post-Reset Payment - Fixed Payment) ] ÷ 12Compares fixed vs variable amortization schedules. Cumulative upfront savings during the teaser phase act as a financial buffer against potential future rate increases upon index adjustment.
All calculations, amortizations, and scenario projections displayed on this page are strictly for informational and educational purposes. Nothing herein constitutes investment, financial, tax, underwriting, or legal advice. Actual interest rates, closing costs, lender fees, and statutory criteria may vary. Calconova explicitly disclaims all liability for any financial decisions or actions taken based upon these calculations. Users are strongly advised to consult a certified financial planner, CPA, or licensed lending officer prior to executing financial commitments.
A 5/1, 7/1, or 10/1 ARM offers a locked, lower interest rate for the first 5, 7, or 10 years (the teaser period). After that introductory window, the interest rate adjusts once every year based on market benchmark indexes (such as SOFR) plus a predetermined lender margin.
Rate caps limit how much your interest rate can fluctuate. The 2/2/5 structure means: your rate can change by a maximum of 2% at the very first reset, no more than 2% in any subsequent annual adjustment, and can never rise by more than 5% above your initial starting interest rate over the life of the loan.
An ARM is ideal if you plan to sell the home, relocate, or refinance within the initial fixed teaser window (e.g., within 5 or 7 years). You capture thousands of dollars in guaranteed interest savings without ever facing post-teaser adjustment risks.
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