Adjustable Rate Mortgage Calculator
An adjustable rate mortgage calculator helps you analyze ARM payments, understand rate caps, and predict payment changes over time. Use our free ARM calculator to evaluate worst-case scenarios, payment adjustments, and total interest costs. This tool accounts for initial fixed rates, adjustment periods, rate caps, and payment changes to provide comprehensive mortgage analysis. Calculate your adjustable rate mortgage payments instantly to make informed home financing decisions.
Free • Rate cap analysis • Payment projections
How ARM Calculation Works
ARM Payment Formula
New Rate = Index + Margin (subject to caps)
Periodic Cap: Limits rate increase per adjustment period (typically 2%)
Lifetime Cap: Maximum rate increase over loan life (typically 6%)
Payment Floor: Minimum payment regardless of rate changes
Adjustment Frequency: How often rate can change (usually annually)
Example ARM Payment Analysis
A $300,000 ARM at 3.5% initial rate with 2% annual caps and 6% lifetime cap. After 5 years, if rates rise to maximum, payment could increase from $1,347 to $2,155 monthly.
This worst-case scenario helps you prepare for maximum potential payment increases.
Benefits of ARM Analysis
Frequently Asked Questions
What is a good ARM rate cap?
Good ARM caps are typically 2% annual increase limit and 6% lifetime cap. Lower caps provide more payment security but may have higher initial rates.
When do ARM rates adjust?
Most ARMs adjust annually after an initial fixed period (3, 5, 7, or 10 years). Some adjust semi-annually or monthly with different terms.
Should I choose ARM or fixed-rate mortgage?
Choose ARM if you plan to sell before adjustment period or can handle payment changes. Fixed-rate offers payment stability for long-term homeowners.
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Calculate Your ARM Payments
Get comprehensive ARM analysis with rate caps, payment scenarios, and worst-case projections for informed mortgage decisions.
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