A fixed rate mortgage offers predictable monthly payments for the life of the loan. Other products, such as adjustable rate or interest-only loans provide borrowers with greater flexibility in the early years of the loan through lower initial interest rates and lower payments. But the loans are all amortized over 30 years, so higher payments are inevitable. Adjustable rate and interest-only loans provide lower rates and payments now, but can result in sharply higher payments in future years. Borrowers expecting a significantly higher income in coming years, may find these loans appealing.
Mortgage calculators
ARM vs. Fixed Rate Mortgage
Compare the monthly payments for a fixed rate mortgage, adjustable rate mortgage, and interest-only loan. Before you decide to take a loan, use this calculator to see how the initial payment difference can change in future years.
