Fixed vs Variable Rate Calculator

About this calculator

This calculator compares the total interest cost of a fixed-rate loan, where the interest rate stays the same for the entire term, against a variable-rate (adjustable) loan, where the rate can move up or down with the market — using an expected average rate you supply to represent how the variable rate is likely to behave over time.

A fixed rate offers payment certainty: you know exactly what you'll pay every month regardless of what happens to interest rates. A variable rate often starts lower than a comparable fixed rate (sometimes as a 'teaser' rate on an ARM — adjustable-rate mortgage), but carries the risk that rates rise during your term, potentially costing more in total interest than the fixed alternative would have.

Borrowers shopping for a mortgage, auto loan, or personal loan use this comparison to weigh the trade-off between predictability and potential savings — the outcome depends heavily on your assumption for the average future variable rate, which this calculator lets you adjust to test different scenarios.