| Calculators >> Adjustable Rate
Mortgage Calculator Adjustable rate mortgages can provide attractive interest
rates, but your payment is not fixed. This calculator helps
you to determine what your adjustable mortgage payments may
be.
Definitions
- Adjustable Rate Mortgage (ARM)
- This calculator shows a fully amortizing ARM
which 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
at the frequency specified. A Fully Amortizing
ARM will also have a maximum rate that it will
not exceed. 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
- Initial annual interest
rate for this mortgage.
- Term
in years
- The
number of
years over
which you
will repay
this loan.
The most
common mortgage
terms are
15 years
and 30 years.
- Interest
rate
cap
- This
is
the
highest
interest
rate
allowed
by
your
mortgage.
Your
actual
interest
rate
will
not
be
adjusted
above
this
rate.
- Months
before
first
adjustment
- This
is
the
number
of
months
that
the
interest
rate
is
fixed.
After
this
period,
the
interest
rate
will
be
subject
to
rate
adjustments.
If
you
enter
zero
in
this
field,
we
assume
that
the
rate
will
begin
making
adjustments
after
initial
period
of
time
between
adjustments
has
passed.
If
any
number
other
than
zero
is
entered,
the
first
adjustment
will
take
place
at
that
time,
and
adjustments
will
happen
at
the
frequency
entered
in
the "months
between
adjustments" field.
- Expected
adjustment
- The
amount
you
believe
that
your
mortgage's
interest
rate
will
change.
This
amount
will
be
added
to
or
subtracted
from
your
interest
rate.
- Months
between
adjustments
- The
number
of
payment
periods
between
potential
adjustments
to
your
interest
rate.
The
most
common
is
12
months,
which
means
your
payment
could
change
at
most
once
per
year.
- Starting
monthly
payment
- Monthly
principal
and
interest
payment
(PI)
based
on
your
beginning
balance
and
starting
interest
rate.
- Total
payments
- Total
of
all
monthly
payments
over
the
full
term
of
the
mortgage.
This
total
payment
amount
assumes
that
there
are
no
prepayments
of
principal.
- Total
interest
- Total
of
all
interest
paid
over
the
full
term
of
the
mortgage.
This
total
interest
amount
assumes
that
there
are
no
prepayments
of
principal.
|
Information and
interactive calculators are made available to you as self-help
tools for your independent use and are not intended to provide
investment advice. We can not and do not guarantee their
applicability or accuracy in regards to your individual circumstances.
All examples are hypothetical and are for illustrative purposes.
We encourage you to seek personalized advice from qualified
professionals regarding all personal finance issues.
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