As the name suggests, adjustable-rate mortgages (ARMs) have interest rates that change over time, rather than staying fixed for the life of the loan. Our ARM calculator helps you estimate the potential monthly payment and lifetime costs of an adjustable rate mortgage based on ARM type and loan details.
Adjustable Rate Mortgage Calculator
Estimate your ARM payments, see how rate adjustments affect your costs over time, and explore the full amortization schedule.
Important ARM terms to know
Initial (or teaser) rate: The rate during the initial introductory period, when your interest rate is fixed—typically 3, 5, 7, or 10 years.
Adjustment interval: How often your interest rate changes after the fixed period—commonly every six months or one year.
Index: The benchmark rate your ARM follows after the fixed period. The Secured Overnight Financing Rate (SOFR) is the most common, but certain lenders may use others, like the COFI.
Margin: The fixed percentage a lender adds to the index to set your new rate. This is commonly 2–3.5%, but can vary by lender.
Initial adjustment cap: The maximum your rate can increase at the first adjustment. This is often set at 2%.[1]
Periodic rate cap: The maximum amount your rate can increase at future adjustments. Two percent is typical.
Lifetime cap: The highest your rate can ever go — often capped at 5% above your starting rate.
How to get help choosing a mortgage
Working with a mortgage broker can streamline the process of choosing a mortgage. Mortgage brokers don’t lend money directly. Instead, they tap into their extensive mortgage lender network to find a loan that you qualify for. They can scour multiple mortgage loan products at once to help you compare offers in one sitting based on your credit, income, and long-term goals.
If you’re ready to start shopping, Best Interest Financial can help. Best Interest Financial is a mortgage broker with a team that has decades of experience closing over $1 billion in loans. They're experts at identifying solutions that large retail banks miss. Talk with a Best Interest loan officer to explore your mortgage options.
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Disclaimer: This calculator is intended for educational purposes only. Actual available rates and monthly payment amounts are subject to market fluctuations, and will depend on many factors not included in this calculator which may affect your purchasing power, such as where you live, your credit history, market conditions, and the type of mortgage you want. These estimates are based upon the information you provide, and may not include other fees and costs, such as taxes and insurance. The actual payment obligation may be greater.