Free ARM Calculator
Compare an adjustable-rate mortgage to a fixed-rate by estimating payments during the initial fixed period and after the first rate adjustment.
USD
%
years
%
%
years
ARM Initial Payment
$2,334.29
Estimated Payment After Adjustment$2,802.64
Fixed Rate Payment (comparison)$2,594.39
Monthly Savings During Fixed Period$260.10
Total Savings During Fixed Period$15,606
Balance at Rate Adjustment$371,049
ARM Initial Payment vs Initial Fixed Period
Adjustable-Rate Mortgage (ARM)
An ARM starts with a lower fixed rate for an initial period, then adjusts periodically based on a market index plus a margin.
Common ARM Structures
Rate Caps
ARMs have caps limiting rate changes:
When an ARM Makes Sense
Example Calculation
A $400,000 loan. 5/1 ARM at 5.75% initial, expected adjustment to 7.75%. Comparable 30-year fixed at 6.75%.
- 01ARM initial payment (5.75%, 30-year amortization): $2,334.29
- 02Fixed rate payment (6.75%): $2,594.26
- 03Monthly savings during initial period: $2,594.26 - $2,334.29 = $259.97
- 04Total savings over 5 years: $259.97 x 60 = $15,598
- 05Balance at year 5: approximately $371,342
- 06Adjusted payment at 7.75% for remaining 25 years: $2,803.14