ARM Mortgage Calculator
ARM Payment Estimate
Estimate payments during fixed and adjustable periods
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Formula
M = P[r(1+r)^n] / [(1+r)^n - 1], recalculated at adjustment with new rate and remaining balance
Frequently Asked Questions
What is an ARM mortgage?
An adjustable-rate mortgage (ARM) has an interest rate that changes after an initial fixed period. A 5/1 ARM has a fixed rate for 5 years, then adjusts annually. ARMs typically start with lower rates than fixed-rate mortgages.
What are the risks of an ARM?
The main risk is payment shock when your monthly payment increases significantly at adjustment. Rate caps limit changes per period and over the loan life, but payments can still rise substantially.
When does an ARM make sense?
ARMs work well if you plan to sell or refinance before the fixed period ends, expect rates to fall, or need the lowest possible initial payment.
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