June 23, 2016

Adjustable Rate Mortgage Calculator ARM

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]

Loan Amount($)

Loan Term (Years)

Starting Interest(%)

First Payment Date

Rate Adjustments


Rate Fixed For(Yrs)

Months Between Adjust

Exp Adjustment(%)

Interest Rate Cap(%)

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.

Mortgage amount

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.

Expected adjustment

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.

Total payments

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.

Total interest

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.

Disclaimer

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.