ARM Mortgage Calculator
See your payment now, after it adjusts, and how it compares to a fixed rate.
- How does a 7/1 ARM work?
- A 7/1 ARM keeps one fixed rate for the first 7 years, then adjusts — typically once a year after that — based on a market index plus a lender margin, within caps set by the loan. The initial payment is calculated as if that starting rate applied for the full loan term.
- Is an ARM or a fixed-rate mortgage better?
- It depends on how long you plan to keep the loan and what you think rates will do. An ARM usually starts cheaper, which helps if you’ll sell or refinance before the fixed period ends; a fixed rate trades a possibly higher starting payment for certainty that it never changes.
Enter your numbers and press Calculate to see your results.
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ARM vs. Fixed: What Changes When the Rate Adjusts
This calculator shows three numbers for an adjustable-rate mortgage: the starting payment during the initial fixed period, the payment after it adjusts using your own rate assumption, and a worst-case payment if the rate rises all the way to its lifetime cap — plus a side-by-side comparison against a fixed-rate loan at a rate you enter.
The starting payment is calculated the standard way ARMs are quoted: as if the initial rate applied for the entire loan term, even though it won’t. After the fixed period, the remaining balance is re-amortized over whatever time is left, at whichever rate you’re testing.
Nobody can know what rates will actually do years from now. The "your rate assumption" and "worst case" scenarios exist to show a plausible range, not a prediction — the real value is seeing how sensitive your payment is to that uncertainty before committing to an ARM.
How this is calculated
Initial payment = standard amortization at the initial rate over the full term. After the fixed period, payment = amortization of the remaining balance over the remaining term at the new rate.
Assumptions
- The initial payment is calculated by amortizing the full loan amount over the entire loan term at the initial rate — the standard way ARM payments are quoted.
- After the fixed period, this calculator assumes the rate immediately becomes your entered rate assumption and stays there. Real ARMs adjust periodically (often annually) based on a market index plus a margin, which this simplifies into one assumption.
- The worst-case scenario caps the rate at the initial rate plus your lifetime cap — the actual cap structure (initial, periodic, and lifetime caps) varies by loan and is usually spelled out in the loan estimate.
Frequently asked questions
What does "7/1" mean in a 7/1 ARM?
What is a lifetime cap?
Why would I choose an ARM over a fixed rate?
Can my payment go down when the rate adjusts?
What should you calculate next?
ARM Mortgage Calculator answers one part of the picture. These pick up where it leaves off.
This calculator provides estimates for educational purposes only and is not personalized financial advice. Rates, taxes, and financial products change — verify with providers and qualified professionals.