Mortgage Calculator: Adjustable Rate Mortgage (ARM) Rates

How are adjustable-rate mortgage (ARM) rates calculated?

Adjustable-rate mortgage (ARM) rates are determined by an index that is based on the economy, in addition to a credit-based margin that your lender determines. Unlike fixed-rate mortgages, ARM rates fluctuate over time, increasing or decreasing according to the index.

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended as a solicitation for any credit product or to provide credit advice. Calculators and input options are intended solely for general information and educational purposes. Calculations are hypothetical, and based on information and assumptions provided by you. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. You should not take any action on the basis of the information provided through this calculator. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

How to use this calculator

Using the adjustable-rate mortgage calculator, you can get an estimate of your adjustable-rate payments over time, based on historical data.

Home info: 

Begin by entering basic home information, including purchase price, percentage of down payment, yearly property tax and homeowner’s insurance, and the state and federal tax rate. To find property taxes, check MLS listings online, or contact your county’s assessor/recorder’s office or a local real estate agent. Calculate homeowner’s insurance here, or contact an insurance agent for a quote.

Loan info:

Next, enter specifics about your loan. This includes the period of the loan, initial interest rate, months before first adjustment, months between rate adjustments, and your prediction of whether rates will increase, decrease, or remain the same. Your interest rate will be determined by your mortgage broker, but if you aren’t yet to this step, you can find current rates here. In a 5/1 ARM, your fixed-rate period (i.e., “Months before first adjustment”) is the “5” (enter “60” for months if you have a 5/1 ARM) and how often the rate changes (i.e., “Months between rate adjustments”) is the “1” (enter “12” for months).

Adjustment terms: 

To determine adjustment terms, we recommend that you speak with a mortgage specialist to learn more. Together, you can walk through the current ARM rates and terms.