Smart Rate Adj Mortgage vs. Fixed Rate

A fixed rate mortgage has the same payment for the entire term of the loan. A Smart Rate adjustable mortgage (ARM) has a rate that can change, causing your monthly payment to increase or decrease. Use this calculator to compare a fixed rate mortgage to two Smart Rate adjustable mortgage scenarios:

A fully amortizing Smart Rate mortgage on which you make the minimum payments required.
A fully amortizing Smart Rate mortgage on which you choose to make a larger, fixed payment each month. Most people want to see how quickly they can pay down their adjustable rate mortgage if they were to make the same higher payment required for a fixed rate mortgage for the same loan amount. For this reason, default 'Desired Fixed Monthly Payment' is equal to the fixed rate mortgage payment.

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By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

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Smart Rate Adj Mortgage vs. Fixed Rate

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Fixed mortgage:

Mortgage type:

Mortgage type

New

Existing

Mortgage amount:*This entry is required.Enter an amount between $100 and $100,000,000

Interest rate:*This entry is required.Enter an amount between 0% and 25%

New mortgage term in months:*This entry is required.Enter an amount between 12 and 480

Payments made:*This entry is required.Enter an amount between 0 and 360

Estimated balance:

Monthly payment:

Report amortization:

Report amortization

Annually

Monthly

Smart Rate Adj Mortgage:

Interest rate:*This entry is required.Enter an amount between 0% and 25%

Term in months:*This entry is required.Enter an amount between 12 and 480

Years rate fixed:*This entry is required.

Annual rate change:*This entry is required.Enter an amount between -3% and 3%

Lifetime rate cap:

Monthly payment:

Desired fixed monthly payment:

Monthly payment*:*This entry is required.Enter an amount between $0.00 and $50,000.00

**FIG_GRAPHTITLE** Line Graph: Please use the calculator's report to see detailed calculation results in tabular form.

Loan Balances by Year

Definitions

Fixed Mortgage

A fixed rate mortgage has the same interest rate and monthly payment throughout the term of the mortgage. The payment is calculated to payoff the mortgage balance at the end of the term. The most common terms are 15 years and 30 years.

Mortgage amount

Expected balance for your mortgage. If this is a new mortgage, enter the new mortgage amount. If this is an existing mortgage, enter the original mortgage balance and the tool will estimate your remaining loan balance.

Interest rate

Annual interest rate for each mortgage type. Typically an ARM will have a lower interest rate than a fixed rate mortgage.

Term in months

The number of months over which you will repay this mortgage. The most common mortgage terms are 15 years (180 months) and 30 years (360 months). For existing mortgages, this is the original term in months.

Payments made

Number of payments that have been made on the mortgage if this is an existing mortgage. The tool uses this, the original mortgage balance and the original term length to estimate the remaining loan balance.

Smart Rate Adjustable Mortgage

This is an fully amortizing adjustable rate mortgage (ARM). The monthly payment is calculated to payoff the entire mortgage balance at the end of the term. The term is typically 30 years, but you can select any term length. After the fixed interest rate period has passed, the interest rate and payment adjusts annually. A Fully Amortizing ARM will also have a maximum rate that it will not exceed.

Smart Rate Adjustable Mortgage Choices
ARM Type	Months Fixed
5/1 ARM	Fixed for 60 months, adjusts annually for the remaining term of the loan.
3/1 ARM	Fixed for 36 months, adjusts annually for the remaining term of the loan.

Years rate fixed

This is the number of years the rate is fixed for an ARM. During this period the interest rate and the monthly payment will remain fixed. The rate will then adjust annually by the annual rate change.

Annual rate change

The annual adjustment you expect in your ARM. The range for this calculator is minus 2% to plus 2%. Use a negative value if you believe interest rates will decrease, a positive value if you believe they will increase.

Interest rate cap

This is the maximum interest rate for this mortgage. The mortgage's interest rate will never exceed the interest rate cap.

Desired fixed monthly payment

This is the desired monthly payment you would like to make with a new Smart Rate Adjustable Mortgage. The amount defaults to the amount needed to maintain your original fixed rate payment. This payment can be any amount at or higher than the calculated payment for the new Smart Rate Adjustable Mortgage.

Third Federal Savings and Loan Association of Cleveland
7007 Broadway Ave.
Cleveland, OH 44105

Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

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