Northern Virginia mortgage comparison

Would the lower ARM payment still feel worth it after the rate starts moving?

Give me the two written loan quotes. I’ll compare the introductory payment, the contractual adjustment limits, and what each mortgage may cost at the year you expect to make your next decision.

Start the comparisonSee how the answer works

By Abraham Walker · Northern Virginia real estate agent · Research reviewed August 20, 2026

AWLet’s begin with the amount both lenders are actually financing.

Step 1 · Starting point

What price and down payment are you planning around?

Use the same purchase price and down payment for both quotes. That keeps this comparison focused on the mortgage structure instead of quietly changing the deal.

$
%
That is $150,000 down and a $600,000 loan.
AWNow show me the quote that buys you payment certainty.

Step 2 · Fixed-rate quote

What stays fixed?

The note rate and principal-and-interest payment stay fixed. Taxes, insurance, association dues, and sometimes mortgage insurance can still change.

%
Use the note rate, not APR.
$
Lender and settlement charges after lender credits. Exclude down payment and escrow funding.
Estimated fixed principal-and-interest payment: $0 per month.
AWNext, let’s translate the ARM’s shorthand into the promise you are actually signing.

Step 3 · ARM quote

How long is the introductory rate protected?

A 5/6 ARM is fixed for five years, then may adjust every six months. A 5/1 ARM is fixed for five years, then may adjust once a year.

%
$
The introductory ARM payment is $0, currently $0 than the fixed payment.
AWThis is the part I would not let you skip, because the lowest payment is only the opening chapter.

Step 4 · Adjustments and caps

What can happen after the introductory period?

Your lender’s ARM disclosure should show the index, margin, and caps. The fully indexed rate is the index plus the margin, but the contract’s caps limit how quickly the note rate can move.

%
The outside benchmark named in the ARM disclosure.
%
The lender’s contractual amount added to the index.
points
point
points
7 years. Think about selling, refinancing, or paying it off, not only moving.
Why isn’t the fully indexed rate a prediction?

The index can change. I use today’s index plus your margin as a planning path, then separately show a lower-rate path and the contract’s maximum path. None predicts where rates will be.

Today’s fully indexed planning rate is 7.00%. The contractual maximum is 10.50%.
AWHere is the trade I want you to see: today’s savings beside tomorrow’s uncertainty.

Your answer

Planning scenario · not a rate forecast

The ARM is ahead.

Intro payment change$0
First planning reset$0
Maximum payment$0

Interactive payment path

How the monthly payments may separate

Touch, click, use the arrow keys, or hover over a year to inspect both payments.

Fixed paymentARM payment
Select a point on the chart.
View the exact year-by-year table
YearFixed paymentARM paymentARM advantage
Change one answer without starting over
Price and down paymentFixed quoteARM quoteCaps and timing

Common questions

What I would want you to understand before choosing

Does a lower ARM rate mean it is the better loan?

No. Compare the introductory savings, net costs, first adjustment, maximum payment, likely hold period, and your ability to absorb payment changes.

What do 5/6 and 5/1 mean?

The first number is the fixed introductory period in years. The second describes how often the rate may change afterward: every six months or every year.

What are index and margin?

The index is an outside benchmark. The margin is the lender’s contractual addition. Together they form the fully indexed rate, subject to caps and any floor.

What do the three caps mean?

The initial cap limits the first change, the subsequent cap limits later changes, and the lifetime cap limits how far the rate can rise above its starting point.

Can I assume I will refinance before the ARM changes?

No. Future rates, value, credit, income, equity, and loan availability are unknown. The comparison should still be tolerable if refinancing is unavailable.

Why doesn’t ARM APR show the worst case?

APR is useful for comparing costs under required assumptions, but CFPB notes that an ARM’s APR does not show its maximum possible rate.

Why compare the remaining balance too?

At sale or refinance, the payoff still matters. A payment-only comparison can hide a balance difference.

Does this determine whether I qualify?

No. A licensed lender must evaluate income, debts, credit, assets, property, reserves, and program rules.

Important limitations

Use this comparison as a planning conversation—not as a loan quote or rate forecast.

Educational estimate. The calculator uses the figures and ARM terms you enter. It is not a Loan Estimate, Closing Disclosure, approval, commitment to lend, qualification decision, financial advice, tax advice, legal advice, or guarantee of payment, savings, refinancing, sale, or future market conditions.

The written loan documents control. Confirm the index, margin, floor, adjustment dates, initial/subsequent/lifetime caps, payment calculation, fees, and prepayment terms in the lender’s Loan Estimate, ARM disclosure, note, and closing documents. The lower-rate, planning, and maximum paths are comparisons—not predictions.

Do not rely on a future refinance or sale. Rates, value, credit, income, equity, loan programs, and transaction timing may change. Consider whether the maximum permitted payment would remain manageable if refinancing or selling is unavailable.

No relationship is created. Using this tool or requesting a reviewed copy does not by itself create a lender, borrower, client, agency, brokerage, fiduciary, or other professional relationship. Any representation requires a separate written agreement signed by the applicable parties.

Continue your home-buying journey

Use the rate structure to clarify risk, not predict future rates.

Return to the financing stage to compare the ARM terms with your expected ownership horizon and reserves. Then test whether paying points fits that same timeline.

Return to: Compare financing structures Next: Test the break-even point for points

Continue your plan

Put this result back into the full journey

Your result answers one question. Return to the decision it supports, verify the assumptions, and take the next useful step.

Relocation Guide: Compare financing for your move

Retain your comparison

Want me to quality-check and email this worksheet?

You can use and adjust the calculator freely. To retain the personalized comparison, submit your information and I will review the entries before sending it. No cost. No obligation.

This educational planning tool is not a loan offer, financial, tax, or legal advice, and does not create a brokerage, lender, agency, or representation relationship. Rates, indexes, payments, qualification, and future market conditions can change. Past performance does not guarantee future results. Review written loan disclosures with a licensed lender and use independent advisers where appropriate.

Sources and calculation notes

How the comparison is built

The engine amortizes both loans monthly. At each permitted ARM reset it applies the selected scenario, then constrains the change using the initial, subsequent, and lifetime caps. The selected-horizon position combines principal-and-interest paid, remaining payoff, and entered net loan costs.

Research last reviewed: August 20, 2026. Next scheduled review: November 2026.

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