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What’s the difference between a fixed rate mortgage, an adjustable rate mortgage and a mortgage that is first fixed and then adjustable?

With a fixed rate mortgage your interest rates and monthly payments remain unchanged for the life of the loan. Adjustable rate loans have payments that can go up or down depending upon market interest rates. Adjustable rate mortgages normally start at a lower rate than fixed rate mortgages but change depending the margin and index they are based on. Fixed to adjustable loans are hybrid loans that offer a combination of fixed and adjustable rate mortgage. Rates are fixed for a certain number of years and then the loan converts to an adjustable rate loan. Mortgage payment calculators and adjustable rate mortgage calculators can be used to calculate the payments on fixed rates loans, adjustable rate loans and hybrids and view how these programs payments compare. The mortgage calculators can also be used to see how the monthly mortgage payments may vary depending upon changes to the underlying index in the future.

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