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Adjustable Rate Mortgage Calculator

This adjustable rate mortgage (ARM) calculator allows you to see how your monthly payments with an ARM type loan might change over time. This calculator allows you to evaluate true ARM loans, as well as hybrid loans. This planning tool provides estimates of initial monthly mortgage payments, maximum payments, and presents the data for each year of the mortgage.

Calculator Definitions

The variables used in our online calculator are defined in detail below, including how to interpret the results.

Total Home Loan Amount ($)

The total amount of money borrowed for this mortgage, also referred to as the principal of the loan.

Annual Interest Rate (%)

This is the annual interest rate on the mortgage. This is not the APR, which takes into account other costs associated with the mortgage. With an ARM, this value would be the starting interest rate.

Term of the Loan (Years)

The term of the loan is the number of years over which the mortgage will be repaid. The most common mortgage terms are 15, 20, and 30 years.

Fixed Rate Period (Years)

This is the number of years the interest rate on the loan remains fixed before it starts adjusting. This is sometimes referred to as the resetting date.

Adjustment Period (Years)

This is the number of years between each adjustment. For example, a 5/1 ARM remains fixed for five years, then adjusts each year. This second value is considered the adjustment period.

Anticipated Adjustment (% / Year)

This is your best guess as to the anticipated annual adjustment that will occur each year. This value will be used to increase the effective interest rate on the ARM in each adjustment period. This value should never be higher than the annual rate cap on the loan.

Interest Rate Cap (%)

This is the interest rate cap on the loan. ARMs will usually quote the maximum interest rate, or cap, that can be charged over the life of the loan. This value is usually referred to as the lifetime maximum.

Rate (%)

This value is the calculated interest rate applied to the loan in the year indicated. This rate is based on the terms of the loan entered earlier.

Payment ($)

This is the monthly mortgage payment on the ARM in the year indicated. This value is a function of the years remaining for the loan, the interest rate charged, and the outstanding balance on the loan.

Balance ($)

This is the outstanding balance on the loan for the year indicated. This value is also referred to as the remaining principal of the mortgage.

Initial Monthly Payment ($ / Month)

This is the initial, or starting, monthly mortgage payment for this loan.

Maximum Monthly Payment ($ / Month)

This is the theoretical maximum monthly payment that can occur with this ARM. Keep in mind this value is also a function of the index used on this ARM, and depending on economic conditions, the interest rate may never reach the maximum.

Total Payments ($)

The total amount paid to the bank or lending institution over the life of the mortgage, based on the ARM scenario created.

Total Interest Paid ($)

The total amount of interest charges over the term of the mortgage. This is the cost of borrowing money from the lending institution.

Adjustable Rate Mortgage Calculator

Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.