This
calculator generates a fully amortizing ARM, which is the most common type of Adjustable Rate Mortgage (ARM). The monthly Adjustable Rate Mortgage (ARM) payment is calculated to payoff the entire mortgage balance by the end of the term. The Adjustable Rate Mortgage (ARM) term is typically 30 years. At the end of the fixed interest rate period, the interest rate and payment adjust at the frequency specified in the Adjustable Rate Mortgage (ARM) agreement. A Fully Amortizing Adjustable Rate Mortgage (ARM) will also have a maximum rate, often referred to as a cap, that it will not exceed.
The most common types of Fully Amortizing Adjustable Rate Mortgages (ARMs) are:
Adjustable Rate Mortgage (ARM)
amount
- Original or expected balance for your Adjustable Rate Mortgage (ARM).
Starting interest rate - Initial annual interest rate for this Adjustable Rate Mortgage (ARM).
Term in years on Adjustable Rate Mortgage (ARM) - The number of years over which you will repay this Adjustable Rate Mortgage (ARM). The most common mortgage terms are 15 years and 30 years.
Interest rate cap - This is the highest interest rate allowed by your Adjustable Rate Mortgage (ARM). 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 on your Adjustable Rate Mortgage (ARM). 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
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 Adjustable Rate Mortgage (ARM) payments could change at most once per year.
Starting monthly payment - Monthly principal and interest payment (PI) on the Adjustable Rate Mortgage (ARM) based on your beginning balance and starting interest rate.
Total payments - Total of all monthly payments over the full term of the Adjustable Rate Mortgage (ARM). 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 Adjustable Rate Mortgage (ARM). This total interest amount assumes that there are no prepayments of principal on the Adjustable Rate Mortgage (ARM). Use this calculator to calculate the annual percentage rate APR for adjustable rate mortgage (ARM).