Adjustable Rate Mortgage Calculator ARM
Many homeowners explore adjustable rate mortgages for a variety of reasons. Because ARM’s offer very low introductory interest rates, borrowers can use the savings to pay down loans faster, apply the money saved to short-term investments, or move up to another home before the loan adjusts to a higher rate. The adjustable rate mortgage also makes sense for couples who expect their income to increase exponentially over the next few years, or for those who relocate periodically because of changes in employment. While some homebuyers will still prefer the security of a fixed rate mortgage, an ARM also offers an attractivealternative for those who may not immediately qualify for more conventional financing.
Adjustable Rate Mortgage Calculator [Enter Number]
FAQ’s-Terms To Know
Months Before First Adjustment
This pertains to the number of months that the interest rate remains fixed. After this time period, the interest rate will begin to adjust. If you enter ‘zero’ in this field, it is assumed that the rate will begin to adjust after the initial period of time between adjustments is over. If you enter a number besides zero, the first adjustment will take place at this time, at “months between adjustments” field.
Original amount of mortgage loan.
Starting interest rate
Beginning interest rate for mortgage.
Term in years
The number of years for mortgage loan repayment. The majority of loans are for 15 or 30 years.
Interest rate cap
This is the ‘ceiling’ or highest interest rate charged by the mortgage company for the loan. The interest rate may not be adjusted beyond the interest rate cap.
The anticipated amount that you think your interest rate will increase when it adjusts. This will either be added to or subtracted from the interest rate.
Months between adjustments
This is the number of months between interest rate adjustments. A period of 12 months is most common, raising or lowering the monthly mortgage payment not more than once a year.
Starting monthly payment
The initial monthly mortgage payment at the time of loan origination. This is based on the beginning balance and original interest rate.
This is the combined total of all monthly payments over the course of the mortgage loan. The total assumes however, there are no prepayments of principal made on the loan.
The total of all the interest paid over the entire mortgage loan term. The total assumes however, there are no prepayments of principal made on the loan.
While we make every effort to ensure the accuracy of the adjustable rate mortgage calculator tool, we are not liable for damages, whether monetary, incidental, consequential or otherwise in connection with its use. The calculator tool is not intended as a replacement for professional independent financial advice.