The two main mortgage structures differ in how the interest rate behaves over time.
Fixed-rate mortgage
The rate — and your principal-and-interest payment — stays the same for the entire term. It is predictable and simple, which is why the 30-year fixed is the most popular loan in the US. The trade-off is that the starting rate is usually a little higher than an ARM's intro rate.
Adjustable-rate mortgage (ARM)
An ARM starts with a fixed intro period (often 5, 7 or 10 years) at a lower rate, then adjusts periodically based on market rates. Your payment can rise or fall after the intro period. ARMs suit buyers who expect to move or refinance before the rate adjusts.
Which should you choose?
If you value predictable payments and plan to stay put, a fixed rate is usually safer. If you are confident you will sell or refinance within the intro window, an ARM can save money early on. Because this calculator assumes a fixed payment, treat ARM estimates as the intro period only.