ARM Calculator
An adjustable-rate mortgage (ARM) starts with a low intro rate, then resets to market rates. This calculator shows your payment during the intro period and what it becomes at the first adjustment.
How to use this calculator
- Enter loan amount.
- Enter intro rate (%).
- Enter intro period (months).
- Enter loan term (years).
- Enter rate at first adjustment (%).
- Your results appear instantly below and update as you change the numbers.
How this calculator works
The calculator computes two standard amortized payments: one at the intro rate for the initial period, then the remaining balance re-amortized at the adjusted rate for the rest of the term. The gap between them is the payment shock to expect at the first adjustment. Rate caps (commonly 2% per adjustment, 5% lifetime) cap how much the actual rate can move, so your real increase will be at or below the calculated one if the rate jumps by more than the cap. Worked example: a $400,000 5/1 ARM at 5.5% intro has a $2,271 payment for the first 5 years; at the first adjustment the remaining balance re-amortizes at 7.5%, so the payment rises to about $2,733 — $462 more per month.
Frequently asked questions
How often does an ARM rate adjust?
After the intro period ends, most ARMs adjust once a year. A 5/1 ARM has a fixed rate for 5 years, then adjusts annually; a 7/1 ARM is fixed for 7 years. Each adjustment uses the current index (like SOFR) plus your margin, subject to rate caps.
What are ARM rate caps?
Caps limit how much the rate can move: typically 2 percentage points per adjustment and 5 percentage points over the life of the loan. A 5.5% intro rate on a 5/1 ARM cannot jump above 7.5% at the first adjustment, even if the index soared.
When does an ARM make sense?
An ARM usually wins when you expect to sell or refinance before the first adjustment — the intro rate is typically lower than a fixed rate. The risk is the payment rising if you stay longer than planned and rates are high at adjustment. Know your payment shock before signing.
What is the fully-indexed rate?
Your adjusted rate = index + margin. For example, if the SOFR index is 4.5% and your margin is 2.0%, the fully-indexed rate is 6.5% — but the cap may limit the actual first adjustment to less than that. Enter the worst realistic rate in this calculator to stress-test your payment.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.