Adjustable Rate Mortgage Vs Fixed Rate Mortgage
There are basically 2 types of mortgages – adjustable rate mortgage (ARM) and fixed rate mortgage. The adjustable rate mortgage could make a provision for getting a lower rate of interest. However, the monthly payments you make could vary throughout the whole mortgage term. Adjustable rate mortgages provide interest rates that are less than a fixed rate mortgage. Achieving ownership for only a short term period may make the adjustable rate mortgage a better choice as the cost to a borrower is less but usually more costly in the long-term when compared to a fixed rate mortgage.
Why Should You Use The ARM Vs. Fixed Rate Mortgage Calculator?
ARM vs. fixed rate mortgage calculator would help make a comparison on the mortgage payments made monthly for each type of loan. The calculator makes a comparison of fixed rate mortgage payment to amortize the adjustable rate mortgage and the interest only adjustable rate mortgage. This would help you know how much you would gain or lose owing to the various aspects of the mortgage loan. Knowing this can help you make a decision that would be in your favor. This is the reason why you should use ARM versus a fixed rate mortgage.