Are you tempted to choose ARM for its lower interest rates (at least during the initial period) over the conventional 30-yuear loan and invest the difference?
But you know the ARM rates are subject to change after the initial period. Are you ready for any payment shock? Will your above "Choose ARM and Invest the Difference" strategy still work with potentially higher ARM rates in the future?
Use the calculator below to run the various scenarios by yourself.
Just fill in the loan amount, ARM's initial rate period, initial rate, possible future rates (after the initial period up to year 30, use your estimations), and the conventional 30 or 15-year loan information, plus your estimated annual invest return.
But you know the ARM rates are subject to change after the initial period. Are you ready for any payment shock? Will your above "Choose ARM and Invest the Difference" strategy still work with potentially higher ARM rates in the future?
Use the calculator below to run the various scenarios by yourself.
Just fill in the loan amount, ARM's initial rate period, initial rate, possible future rates (after the initial period up to year 30, use your estimations), and the conventional 30 or 15-year loan information, plus your estimated annual invest return.
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