Mortgage Payment Calculator: Fixed vs. ARM
Estimate your monthly payment on a North Jersey home, including property taxes, homeowners insurance, and PMI. Then compare a fixed-rate mortgage with a 5/6, 7/6, or 10/6 ARM over the years you actually plan to stay.
An ARM's intro payment only tells half the story. This calculator shows what happens when the rate resets, including the worst case, and the break-even rate where the ARM stops saving you money. In towns like Montclair and Bloomfield, where property taxes are a real share of the monthly payment, you want the full picture before you choose a loan.
Start with how long you plan to stay. If you sell before the fixed period ends, the rate never resets.
The home
The loans
Estimates only. This is not a loan offer, a rate quote, or a commitment to lend. Payments do not include HOA dues, flood insurance, or closing costs. ARM figures assume the intro rate holds for the full fixed period, then changes once to the reset rate shown and stays there. Real ARMs adjust every 6 months within caps set by the lender, so the worst case shown here is more severe than a gradual climb. PMI is an estimate and is shown dropping off when the balance reaches 78% of the purchase price. Rates shown are defaults for illustration. Talk to a licensed lender before choosing a loan.
Questions about fixed and ARM loans
What is a 5/6 ARM?
A 5/6 ARM keeps the same interest rate for the first 5 years. After that, the rate can change every 6 months, within caps set by your lender. A 7/6 or 10/6 ARM works the same way with a 7 or 10 year fixed period.
What is the break-even reset rate?
It's the rate where the ARM and the fixed loan cost the same over the years you plan to stay. If the ARM resets below that rate, the ARM saved you money. If it resets above it, the fixed loan would have cost less.
Does an ARM make sense if I plan to move in a few years?
It can. If you sell before the fixed period ends, the rate never resets and you keep the lower intro payment. Set "Years you plan to stay" in the calculator to see the difference, then talk to your lender, because the right loan depends on more than the payment.
Why does the calculator show a worst case?
Because the reset is the risk. The worst case assumes the rate jumps to its lifetime cap at the first reset. Real ARMs usually climb in steps, so actual results are often milder, but you should know the ceiling before you sign.