Adjusted Rate Mortgage Calculator

Our ARM mortgage calculator will help you determine the total cost or your mortgage that you will pay over the term of your loan. There are trade-offs to adjustable rate mortgages. Home buyers may be attracted to the lower interest rates and willing to risk having their interest rate increase or decrease over the loan term. The ARM loans are usually repaid over a 30 year period, but monthly payments may increase or decrease over that term, depending on the movement of interest rates.

How To Use The Adjusted Rate Mortgage Calculator

Here is the information that you will need to use the ARM calculator. Having this information ready will make the process more efficient and accurate, and you will have this information for future calculations and estimates.
Information to gather:

  • Loan for the mortgage amount
  • Starting interest rate
  • Loan term
  • Interest rate cap
  • Fixed interest rate period
  • Months between adjustments
  • Starting monthly payment
  • Total Payments
  • Total Interest


Glossary of terms

Adjustable Rate Mortgage

ARMs are home loans with changing interest rates.

Mortgage Amount

The mortgage amount is the price that you pay each month. Mortgage amount = principal payment + interest payment.

Initial Interest Rate

The initial interest rate is the interest that you pay on your mortgage at the start of your loan term until the end of the agreed upon introductory period.

Term of Years

Also known as the loan term which is the length in time of the loan.

Interest Rate Cap

The highest interest that can be applied to your mortgage to protect the buyer from extreme price fluctuations.

Months Before First Adjustment

The determined period of time that must pass before the lender can change the interest rate.

Expected Adjustment

The amount you expect your mortgage interest rate to change.

Months Between Adjustments

The number of months a buyer is informed before their price adjustment. Usually 12 months.

Initial Monthly Payment

The first mortgage payment.

Total Payments

The total payments that the buyer will make throughout the life of the loan.

Total Interest

The amount of interest that you will have paid on the mortgage over the life of the loan.

Commonly Asked Questions

For most buyers, obtaining a mortgage and buying a home is the largest financial undertaking they will complete in their lifetime. Homes appreciate in value and are typically considered a sound investment for most applicants.

But committing to repay a large amount of money can be confusing. Let’s look at the most commonly asked questions that pop up during the process.

An ARM mortgage is Adjustable Rate Mortgage. This means that the interest rate of the loan will change with the market. If prices (interest rate) go down then your mortgage will decrease. The opposite is also true: if the market goes up, then your mortgage price will increase. The increase or decrease is reflected in your monthly payments. You will pay more during an increase in mortgage interest rates, and less during a decrease in interest.

For your protection, there is an interest rate cap – the highest interest rate allowed by your mortgage. Your actual interest rate will not be adjusted above this rate.


In conclusion, the primary factors for mortgage approval are credit score, income, existing debt, and down payment. As a savvy consumer, you can run scenarios with various inputs to find the right mortgage lending solution for you.

Once you procure a mortgage, be sure to pay your payments on time and include extra principal payments as available. These actions will ensure you are able to refinance should mortgage rates become more desirable.

Home-ownership is a journey and a dream for most Americans. Use the research we’ve compiled to make the most of your adventure toward owning a home.