ARM Mortgage Calculator with Rate Caps

How to do it

1. 1
   Step 1: Open ARM Mortgage Calculator with Rate Caps and add your input

   Type your numbers or text, add your file, or pick the options you need. Nothing is uploaded: everything stays in your browser.

2. 2
   Step 2: What ARM Mortgage Calculator with Rate Caps does

   Project an adjustable-rate mortgage payment after the fixed period using index, margin and rate caps.

3. 3
   Step 3: Read the result and compare

   The result appears at once. Change one value to see how the answer moves, then keep the figure that fits your case.

4. 4
   Step 4: Copy or save it

   Copy the result or download it. For an important decision, confirm it with the official source or an adviser.

About this tool

Enter the loan, the starting rate, the fixed period (3, 5, 7 or 10 years), the margin, the index rate at the first adjustment and how fast you expect it to move, and the caps. The tool builds a year-by-year table of rate, payment and balance and shows the worst-case payment at the lifetime cap.

How an ARM adjusts

After the fixed period the new rate is the index plus the margin, but it cannot rise or fall by more than the caps. The first adjustment has its own cap (often 5% on a 5/6 or 7/6 ARM), later adjustments a periodic cap (often 2%), and the rate can never go above the starting rate plus the lifetime cap (often 5%).

What the table assumes

The index rate at the first adjustment is the one you enter, and it then moves by the yearly step you choose. The payment is re-worked at every adjustment so the loan is repaid by the end of the term, and the balance falls with the payments.

Worst case

The worst-case payment assumes the rate is at the lifetime cap right after the fixed period. Check the caps on your loan estimate. Interest-only periods and payment caps used by some option ARMs are not modeled.

Worked example

A $400,000 7-year ARM at 6.0% (payment $2,398.20) with a 2.75% margin and a 4.0% index at the first adjustment: the first adjustment sets the rate at 6.75%, raising the payment to $2,561.58, and with the index rising 0.5% a year the rate reaches 8.25% in year 11. At the 11% lifetime cap the payment would be $3,574.85.

Tips for best results

Check every box before you rely on a result, because one wrong digit changes the whole answer. Use the exact figures from your payslip, bill, certificate or contract, and keep a note of the date you calculated. Rates, thresholds and rules change from time to time, so for tax, fees and legal matters treat the output as an estimate and confirm with the official source named on this page. You can run as many scenarios as you like; nothing is saved or sent, and refreshing the page clears the boxes.