ARM Mortgage Calculator (Adjustable Rate)
Compare the introductory fixed-rate payment of an Adjustable-Rate Mortgage against the worst-case adjusted payment after rate caps. Supports 5/6, 7/6, 10/6 ARMs.
FINANCECompare your introductory ARM payment against the worst-case adjusted payment after caps. Useful for evaluating whether the initial rate discount is worth taking on rate risk.
ARM caps are written as periodic/first/lifetime (e.g., 2/1/5): how much the rate can move at each adjustment, at the first adjustment, and over the loan's life. Index is typically SOFR or 1-year CMT; lender adds a margin (2.5-3% common). Federal law requires lenders to qualify ARM borrowers at the fully-indexed rate, not the teaser.
ARM Mortgage Calculator
Compare the introductory fixed-rate payment of an Adjustable-Rate Mortgage (ARM) against the worst-case adjusted payment after the rate caps kick in. Common ARM types in 2026: 5/6, 7/6, 10/6 (intro fixed years / adjustment months).
When ARMs Make Sense
ARMs offer a lower initial rate than 30-year fixed mortgages in exchange for taking on rate risk. They make sense if (1) you'll sell or refinance before the fixed period ends, (2) you expect rates to fall, or (3) the initial savings let you afford a home you couldn't with a 30-year fixed. After the 2022-2024 rate spike, ARMs returned to roughly 10% of US mortgage origination as fixed rates climbed above 7%.
Read the loan estimate carefully: the "5/6" notation means 5 years fixed then adjusts every 6 months. Index typically SOFR or 1-year CMT. Margin is the lender's spread above the index (usually 2.5-3%). Caps are written as "periodic / first / lifetime" (e.g., 2/1/5). Federal law requires lenders to qualify ARM borrowers at the fully-indexed rate, not the intro teaser rate.
Worst-case scenario only. Actual future adjustments depend on the underlying index. Hybrid ARMs include 5/6, 7/6, 10/6, 5/1, 7/1, and 10/1 - confirm the adjustment frequency with your lender.