## ARM Calculator

This calculator will help you to determine what your adjustable rate mortgage payment will be.

 Mortgage loan amount: Beginning interest rate (%): Mortgage loan term: 30 years 25 years 20 years 15 years 12 years 10 years 5 years Number of months before first rate adjustment: Number of months between adjustments: Expected adjustment (%): Interest rate cap (%): Beginning monthly principal and interest payment: Total monthly payments: Total interest: Maximum monthly payment:

## Adjustable Rates: What They Mean to You

Those who have landed themselves with an adjustable rate mortgage (ARM) lack some of the certainty and absolute payments associated with fixed rate loans, but as the tradeoff goes they gain the possibility of low interest rates for a good part of the life of the loan. A certain amount of that stability and security can be acquired, however, if they are able to look at a clear picture of the prospective principal and interest amortization schedule just as they would with a traditional mortgage. The only difference will be that the amortization schedule in the case of the ARM is anticipatory, rather than set in stone, as the interest rates may or may not fluctuate exactly as you might expect them to.

### How to Plan with an ARM

One of the primary challenges of an unknown interest rate is having your monthly payment amounts be somewhat out of your control. However, you will know enough at the beginning of your loan to give you a fairly precise idea of how much you will be paying over the life of the mortgage. Due to the restrictions surrounding an ARM, such as how often and by how much their interest rates can shift up and down, with a calculator you can get a fairly good idea of what your payment schedule will look like. If your ARM comes with the stipulation that you will pay only interest and at a fixed rate for the first 36 months of your term, for example, that will give you a good basis for estimating what your monthly bills will add up to over the amortization process.