Adjustable-Rate Mortgage (ARM) Calculator
Estimate your initial and worst-case monthly payment on an adjustable-rate mortgage.
Assumptions used in this calculation
- Worst-case adjustment: The worst-case payment assumes the rate jumps straight to the lifetime cap at the first adjustment, actual ARMs usually also cap how much the rate can move per adjustment period.
About this calculator
An adjustable-rate mortgage advertises an attractive fixed rate for its introductory period, but that rate is only locked in temporarily, once the fixed period ends the rate can climb toward its lifetime cap, and the resulting payment jump is calculated on the loan's remaining balance at that point rather than the original amount, a two-step calculation that's easy to underestimate from the initial quote alone. This calculator amortizes your loan amount at the initial fixed rate to find your starting monthly payment, tracks the remaining balance at the end of the fixed period, then recomputes a worst-case monthly payment on that remaining balance at the initial rate plus the lifetime rate cap. Comparing the initial payment against the worst-case payment side by side shows exactly how much your payment could rise if rates move against you after the fixed period, letting you stress-test whether you could still afford the loan at its ceiling rate before committing to an ARM over a fixed-rate mortgage.
Worked example
$400,000 loan, 6% initial rate, 5-year fixed period, 30-year term, 5% lifetime cap
Result: Initial payment ≈ $2,398, worst-case ≈ $3,467 at 11%
Was this helpful?