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Best Loan for My Timeline

Compare fixed-rate, discount points, ARM, and 15-year options based on how long you plan to stay — then filter by whether the payment may fit typical income guidelines. Models ARM adjustments across named rate paths and a Monte Carlo range.

Last updated October 19, 2026

How our math works

Assumptions
  • 30-year loan of $360,000; 30-year par 6.75%, points 6.25%, ARM 5.75% for the first 5 years
  • ARM adjustments are estimates from a 4% index plus a 2.75% margin, limited by your entered caps — actual adjustments will differ
  • Assumes you move in year 7 — actual plans and future rates will differ
  • Affordability labels use typical educational DTI ranges (front-end ~28% comfortable; back-end ≤43% comfortable, 43–50% stretch, >50% outside common ranges) and are not a qualification result
  • Rates shown are interest rates used for estimation only — not APRs and not offers. APR reflects fees and other loan costs and may differ from the interest rate shown.
My scenario

Enter income, debts, price, and rate once. Every calculator pre-fills.

Loan & Timeline

$

years

%

%

Income & Budget

$

Required for a recommendation — we will not crown a winner without it

$

Car, student, credit cards, etc. — optional

$

Optional amount you want left after housing and debts

DTI uses typical educational ranges, not an approval decision. Back-end ≤43% is labeled comfortable, 43–50% stretch, and above 50% as not recommended.
Housing Costs (optional)

$

Used for PMI when down payment is under 20%

$

$

$

Included in each term's housing payment and DTI when entered. Leave blank to compare principal & interest only.
Discount Points Option

%

$

Typically 1% of the loan per point

$

Upfront credit in exchange for a higher rate

%

ARM Option

%

years

%

Added to the index at each adjustment

%

Max rate change at the first reset

%

%

Max increase over the initial rate

%

e.g. SOFR — your rate adjusts toward index + margin

Add income for a recommendation

Income needed

Net cost is shown below, but we will not crown a winner until we can check typical DTI guidelines.

30-Yr Fixed
$2,335
per month
With Points
$2,217
+$7,200 upfront
ARM Start
$2,101
to $2,307 expected
15-Yr Fixed
$3,038
+$703/mo vs 30-year
All Options Compared

Housing payment vs net cost over 7 years. Unaffordable terms are never labeled recommended.

30-Year Fixed (Par)
6.75% rate

Housing payment

$2,335
Baseline 30-year

DTI

Enter income

Net cost

$162,971

Equity built $33,165
30-Year Fixed (Points)
6.25% rate

Housing payment

$2,217
−$118/mo vs 30-year

DTI

Enter income

Net cost

$157,514

Equity built $35,879
5/6 ARM
5.75% rate

Housing payment

$2,101
−$234/mo vs 30-yearP&I up to $2,307

DTI

Enter income

Net cost

$144,384

Equity built $37,042
15-Year Fixed
6% rate

Housing payment

$3,038
+$703/mo vs 30-year

DTI

Enter income

Net cost

$126,350

Equity built $128,832
Lender Credit
7% rate

Housing payment

$2,395
+$60/mo vs 30-year

DTI

Enter income

Net cost

$165,718

Equity built $31,869

30-Year Fixed (Par)

$162,971

30-Year Fixed (Points)

$157,514

5/6 ARM

$144,384

15-Year Fixed

$126,350

Lender Credit

$165,718

ARM Rate-Path Scenarios

Named index paths plus a Monte Carlo P10–P90 payment band — not a single expected line

At year 30: Monte Carlo P10–P90 $2,120 to $2,514; Fixed $2,335, Expected ARM $2,307, Falling index $1,904.

P10 max payment
$2,307
10th percentile
P50 max payment
$2,412
Median path
P90 max payment
$2,633
90th percentile
ARM cheaper share
100%
of 400 paths

Falling index (2.00%)

-2 pts vs expected

Total $171,745 over stay

Expected index (4.00%)

Index stays at your input

Total $181,426 over stay

Rising index (6.00%)

+2 pts vs expected

Total $190,555 over stay

Adjustment Risk

⚠️ The 5/6 ARM adjusts starting year 6 — before your planned move in year 7. At the expected 4% index your payment reaches $2,307/month.

Worst Case

If rates spike, your 2/1/5 caps (initial/periodic/lifetime) still let the payment reach $3,197/month. That bound is cap-driven, not a random draw.

Do Points Pay Off?

Break-even vs your timeline

Key Insights

What these numbers mean for you

Analysis

For a 7-year stay, net cost (payments + upfront − equity built) is lowest on the 15-Year Fixed at $126,350. Enter your gross monthly income before treating any option as a recommendation — a lower lifetime cost can still mean a payment that may not fit typical guidelines.

Analysis

⚠️ 5/6 ARM adjusts starting year 6: at a 4% index + 2.75% margin (capped), the rate becomes 6.75% and the payment rises from $2,101 to $2,307/month before you move.

Analysis

Rate-path range: falling index (2.00%) pays $171,745 over your stay; rising index (6.00%) pays $190,555

Analysis

Monte Carlo (400 seeded index paths, 1.25% annual vol, mean-reverting to 4%): ARM costs less than the 30-year fixed in 100% of paths over a 7-year stay. Total paid P10–P90: $177,951–$185,401

Analysis

⚠️ Worst case from your 2/1/5 caps: rate reaches 10.75% by year 7, pushing the payment to $3,197/month

Analysis

Buying points: Saves $118/month and leaves you owing $2,714 less after 7 years, breaking even in 48 months (4.0 years)

Analysis

Buying points breaks even in 5.1 years — worth it for your 7-year timeline.

Analysis

The 15-year fixed costs $3,038/month (+$703 vs the 30-year) but builds $128,832 of equity by the time you move — the highest of any option.

The Bottom Line

For a 7-year stay, 15-Year Fixed has the lowest net cost at $126,350. Enter income to see which options may fit typical affordability guidelines. Net cost counts interest and fees, not just the payment size. A cheaper lifetime cost is not automatically the right pick if the payment may not fit typical guidelines. These labels are educational — not a qualification result.

Here are the exact formulas behind your numbers. No black boxes — just math.

Net Cost Over Your Timeline

Monthly Payment per Option

$2,335 (30-yr fixed)
Loan × r × (1+r)ⁿ ÷ [(1+r)ⁿ − 1]Standard amortization at each option's rate and term.

Remaining Balance at Payoff

$326,835 (par) vs $324,121 (points)
Standard amortization balance at the end of your holdA lower rate pays down principal faster, so the bought-down loan leaves a smaller balance when you sell or refinance.

Net Cost at Move Time

$126,350 (lowest total cost)
Σ Payments + Upfront Costs − Principal Paid DownWhat each option actually costs you in interest and fees over your expected stay. Equivalent to upfront + interest accrued.

Temporary Buydown Subsidy

Σ (Par Payment − Reduced Payment) over buydown months3-2-1, 2-1, and 1-0 buydowns lower the payment for the first years; the difference is prepaid into escrow. The note rate and amortization stay at par.

Lowest Total Cost

15-Year Fixed
Min net cost over your timelineA cost fact, not automatically a recommendation. Unaffordable terms keep this label but are never called recommended.

Recommendation

Enter income — no winner declared
Filter to terms that may fit typical DTI guidelines, then pick lowest net costRequires gross monthly income. Back-end DTI ≤43% is comfortable, 43–50% stretch, >50% not recommended. Most affordable = lowest housing payment among terms that may fit. Balanced pick = lowest net cost among comfortable terms (or stretch if none are comfortable). Educational — not a qualification result.
ARM Adjustment Math

ARM Initial Payment

$2,101
Loan × r_arm × (1+r_arm)ⁿ ÷ [(1+r_arm)ⁿ − 1]Payment during the fixed period of the 5/6 ARM.

Fully Indexed Rate

6.75%
Expected Index Rate + MarginAfter the fixed period, the ARM rate moves toward index + margin at each adjustment, limited by the caps.

Adjusted Rate

Index + Margin, limited by initial/periodic caps, the lifetime cap, and a floor at the marginAfter the fixed period the rate moves toward the fully-indexed rate using the shared ARM cap model.

Re-amortized Payment

$2,307 (max expected)
Balance × r_adj × (1+r_adj)ᵐ ÷ [(1+r_adj)ᵐ − 1]At each adjustment the payment is recalculated over the remaining months (m).
Worst-Case Rate from Caps (2/1/5)

First Adjustment

Initial Rate + Initial CapThe worst case assumes the index rises enough that the first adjustment hits the initial cap.

Later Adjustments

Previous Rate + Periodic Cap (each adjustment)Each subsequent adjustment adds the periodic cap until the lifetime cap is reached.

Worst-Case Rate

10.75% (reached by year 7)
Initial Rate + Lifetime CapThe lifetime cap limits the total increase above the initial rate.

Worst-Case Payment

$3,197
Remaining Balance re-amortized at the Worst-Case RateThe highest payment along the cap-driven path, based on the balance remaining when the rate peaks.
Rate-path scenarios & Monte Carlo

Named index paths

Falling 2.00% · rising 6.00%
Falling = expected − 2%; expected = your index; rising = expected + 2%Each path is a constant index after the fixed period, then run through the same cap machinery as the loan. Worst case is not a named index — it is every adjustment hitting its cap.

Index process

σ = 1.25% / yr, κ = 0.35, n = 400
x ← x + κ(μ − x)Δt + σ√Δt · Z (floored at 0)Mean-reverting random walk around your expected index. Δt is the adjustment period in years. Z is a seeded standard normal.

P10–P90 total paid

$177,951 to $185,401
Percentiles of ARM payments over your stay across sampled index pathsThe shaded payment band is the same percentiles of the monthly payment each year.

Share of paths ARM is cheaper

100.0% of paths
Count(ARM paid over stay < 30-year fixed paid over stay) ÷ samplesHow often the ARM costs less than the 30-year fixed loan when the index is sampled rather than assumed flat.
Housing Payment & DTI

Full Housing Payment

$2,335 (30-year) / $3,038 (15-year)
P&I + Tax/12 + Insurance/12 + PMI + HOAPITI plus mortgage insurance and HOA when those inputs are provided. Uses the shared mortgage-math module so every calculator agrees.

Front-End DTI

Enter income
Housing Payment ÷ Gross Monthly Income × 100Housing costs as a share of gross income. Around 28% is the common comfortable guideline.

Back-End DTI

Enter income
(Housing Payment + Other Monthly Debts) ÷ Gross Monthly Income × 100Total debt share. ≤43% comfortable, 43–50% stretch, >50% outside typical guideline ranges. Not a qualification result.

30-Year Extra Principal Alternative

Payment to retire in 15 years at the 30-year rate − scheduled 30-year paymentShown when the 15-year is cheapest but may not fit typical guidelines. Extra principal on a 30-year can approximate a 15-year payoff with the flexibility to skip extras.
Points Break-Even

Monthly Savings from Points

$118
Payment at Par Rate − Payment at Bought-Down RateThe monthly payment reduction from buying points.

Break-Even

61 months
Points Cost ÷ Monthly SavingsMonths to recoup the upfront cost of buying points (faster principal paydown is an extra benefit).
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Frequently Asked Questions

The shorter your stay, the more upfront costs and initial rates dominate; the longer your stay, the more lifetime interest matters. Short horizons favor ARMs and fewer points; long horizons favor fixed rates and sometimes 15-year terms. Net cost over your hold is one input — we also check whether each payment may fit typical DTI guidelines before labeling anything recommended.

A 15-year often has the lowest lifetime interest, but the payment can be hundreds of dollars higher than a 30-year. If that payment pushes back-end DTI above typical guideline ranges (around 43% comfortable, 43–50% stretch, above 50% outside common ranges), we will not label it recommended. Enter income so we can separate “lowest total cost” from “most affordable” and a balanced pick. This is educational, not a qualification result.

When the 15-year is cheapest but may not fit typical guidelines, we show extra principal on the 30-year sized to approximate a 15-year payoff, plus the payoff timing and interest saved. You can skip extras in a tight month — a 15-year note would not allow that.

A fixed-rate mortgage keeps one rate for the whole term. An ARM (for example a 5/6 SOFR or 7/6) starts with a lower fixed rate for an initial period, then adjusts periodically based on a market index, subject to caps on each adjustment and over the life of the loan. Most ARMs written today are SOFR-indexed 5/6s that adjust every 6 months after the fixed period; older 5/1 products adjust annually.

An ARM can win if you are confident you will sell or refinance before the fixed period ends, because you pocket the initial-rate savings without facing adjustments. If you may stay longer, look at the rate-path range and the cap-driven worst case — not just the expected index. This calculator shows named falling/expected/rising paths, a Monte Carlo payment band, and the share of index paths where the ARM still costs less than fixed.

ARM caps are usually quoted like 2/1/5: a maximum 2-point increase at the first adjustment, 1 point per later adjustment, and 5 points above the initial rate over the life of the loan. A 5.75% ARM with a 5-point lifetime cap could reach 10.75%. This calculator derives that worst-case rate from the caps you enter, and separately samples 400 mean-reverting index paths so typical outcomes sit in a P10–P90 band rather than a single expected line.

Points pay off when you keep the loan past the break-even point — the point cost divided by the monthly savings. If you might sell or refinance before then, points lose money. The longer you hold, the more points save. Remaining balance is included in net cost, so a lower rate also gets credit for faster principal paydown.

A 1-0, 2-1, or 3-2-1 buydown lowers the borrower payment for the first years while the note rate stays at par. The difference is prepaid into escrow (often by a seller or builder). If you pay it yourself, the subsidy roughly cancels out the payment relief.

Methodology & Data Sources

Calculations use standard amortization formulas on the inputs you provide. Where available, the “Show Me the Math” section above walks through the exact formulas behind your result. Default interest rates (30-yr fixed: 6.75% · 5/1 ARM: 5.75% · 15-yr fixed: 6%) are based on national averages from the Freddie Mac Primary Mortgage Market Survey (PMMS), week of October 15, 2026. Replace defaults with your actual quote for precise results.Content reviewed by the Dett.io editorial team. Last updated: .
Important: This calculator provides estimates for educational purposes only. Results are not a loan offer, pre-qualification, pre-approval, or commitment to lend. Actual rates, terms, payments, and eligibility are determined by mortgage lenders based on your complete financial profile, credit history, property appraisal, and current market conditions. Dett.io is not a lender, broker, or financial advisor. Consult qualified professionals before making financial decisions. See our Terms of Use for full details.