Fixed Rate Mortgage VS ARM Rates – The Free Mortgage Calculator

I notice that most of the visitors to my website seem to use the mortgage calculator and leave. I know that it’s tough to search someones website and find exactly what you’re looking for but there is a wealth of information on my free mortgage website. I discuss each type of mortgage you can get with the bank in case your financial situation is different than someone else’s.

Fixed Rate Mortgage VS ARM Rate Mortgage

Most first time home buyers will get a fixed rate mortgage mostly because of the warning they will get before hand from their peers. It’s definitely a good choice for someone who doesn’t want to pay attention to their monthly payments or principal but it could also be a poor choice.

A fixed rate mortgage is one that is the exact same monthly mortgage payment each month no matter what the interest rates climb to. An ARM Rate, or adjustable rate mortgage, is an interest rates that changes as the federal rates go up and down. Your mortgage payment will change once per year after the fixed period is over. This could be wonderful or very scary because rates can only go so low when they’re already at 5-6%. They can increase up to 2% each year for a total of 6% maximum.

You can use my mortgage calculator to see how much your mortgage payment would increase if it went up 2% and I hope you’re sitting down during this calculation. However, the flip side is that it could go down 2% which was a great type of loan to have 15-20 years ago when interest rates were at 17-20%. Odds are they will be going down before up at that point.

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