ARM Mortgage Calculator

Your details

Preset ARM types define the fixed-rate period and adjustment frequency. Choose Custom to set your own.
The total amount you are borrowing (home price minus down payment).
The full amortization term of the loan.
The annual interest rate during the fixed introductory period.
%
The interest rate change at each adjustment. Use a negative value to model a falling-rate environment.
%
The maximum the rate can change at the very first adjustment (commonly 2% or 5%).
%
The maximum the rate can change at each subsequent annual adjustment (commonly 2%).
%
The maximum total increase from the initial rate over the life of the loan (commonly 5% or 6%).
%
A fixed mortgage rate to compare against your ARM. Enter the current 30-year fixed rate to see potential savings or costs.
%
Annual property tax. Divided by 12 and added to your monthly payment estimate.
Annual homeowner insurance premium. Divided by 12 and added to your monthly estimate.
Currency
Initial monthly payment (P+I)ARM costs more than fixed over full term
$1,987.26

Principal and interest payment during the fixed introductory period.

Initial monthly total (P+I+T+I)$2,387.26
Max possible payment (P+I)$3,201.59
Maximum interest rate10.5%
Total interest paid (ARM)$660,552.77
Total payments (ARM)$1,010,552.77
Fixed-rate monthly payment$2,270.09
Total interest (fixed)$467,233.60
ARM vs. fixed interest difference$193,319.17
Break-even horizonYear 9 (ARM costs more interest after this point)
ARM$662,540.04
Fixed$469,503.70

Interest difference: $193,319.17

  • Initial payment
  • Total interest
Initial P+I$1,987.26
Max P+I (rate cap)$3,201.59
Fixed-rate P+I$2,270.09

5/1 ARM starts at 5.50% with an initial payment of $1,987/month.

  • Your initial monthly payment is $1,987. At the rate ceiling of 10.50%, the maximum payment would be $3,202 - an increase of 61%.
  • Compared with a 6.75% fixed loan, 5/1 ARM costs about $193,319 more in total interest if held to full term.
  • ARMs carry payment-shock risk: budget for the maximum possible payment before choosing an ARM over a fixed-rate loan.

Next stepIf you plan to move or refinance before year 6, you capture the low introductory rate without facing rate resets. If you may stay longer, model the worst-case maximum payment to ensure affordability.

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