Financial Calculators

Adjustable Rate Mortgage Calculator

With many attractive low rates, adjustable rate mortgages became very popular. However, the mortgage rate is not at a fixed rate, so this calculator will help you determine what your payments could be in the future.

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Definitions

Adjustable Rate Mortgage (ARM)

This is the most common type of ARM. The monthly payment is calculated to payoff the entire mortgage balance at the end of the term. The term is typically 30 years. After any fixed interest rate period has passed, the interest rate and payment adjusts annually. A Fully Amortizing ARM will also have a maximum rate that it will not exceed. This calculator uses a maximum interest rate of 12%. Below is a list of the most common types of Fully Amortizing ARMs

Common Adjustable Rate Mortgages
ARM Type	Months Fixed
10/1 ARM	Fixed for 120 months, adjusts annually for the remaining term of the loan.
7/1 ARM	Fixed for 84 months, adjusts annually for the remaining term of the loan.
5/1 ARM	Fixed for 60 months, adjusts annually for the remaining term of the loan.
3/1 ARM	Fixed for 36 months, adjusts annually for the remaining term of the loan.
1 year ARM	Fixed for 12 months, adjusts annually for the remaining term of the loan

Mortgage amount: Original or expected balance for your mortgage.
Starting interest rate: The initial interest rate assigned to your mortgage.
Term in years: Choose the number of years you would like to repay the amount of your mortgage.The most common mortgage terms are 15 years and 30 years.
Interest rate cap: This is the highest interest rate allowed by your mortgage. This calculator assumes it is 12%. Your actual interest rate will not be adjusted above this rate.
Months before first adjustment: This is the number of months the rate is fixed for an ARM. During this period the interest rate and the monthly payment will remain fixed. The rate will then adjust annually by the expected rate change.
Expected adjustment: Expected amount of your mortgage rate's change which will be added to or subtracted from your interest rate.
Months between adjustments: Number of months you will be paying between potential adjustments to your interest rate.
Starting monthly payment: Calculated on your beginning balance of your mortgage and the starting interest rate.
Total payments: Calculated number of total payments you will be making on your mortgage. (15 years = 180 payments, 30 years = 360 payments)
Total interest: Calculated total amount in interest you will pay over the entire term of the mortgage.