Balance at Adjustment
$275,486.20
Adjustable Rate Calculator
Project payments through an ARM's initial fixed period and first adjustment.
Initial Payment
$1,610.46
Payment After Adjustment
$1,947.08
Payment Change
$336.61
Initial Period
5 yrs
How to use the Adjustable Rate Calculator
The Adjustable Rate Calculator is free and runs entirely in your browser — no sign-up, and nothing you enter leaves your device. It opens pre-filled with a realistic example, so you can see how it works before replacing any figure with your own; the results update as you type. Press Calculate to refresh the result panel, or Reset to return to the example.
The inputs it asks for:
- Loan Amount — a dollar amount.
- Initial Rate — a percentage (enter 6 for 6%).
- Initial Fixed Period (yrs) — a number.
- Rate After Adjustment — a percentage (enter 6 for 6%).
- Total Term (Years) — a number.
The formula
An ARM is fixed for an initial period, then resets. It computes the initial payment as if the starting rate ran the whole term, tracks the balance down to the reset date, then re-amortizes that remaining balance over the remaining months at the adjusted rate:
Payment after reset = amortize(balance at reset, adjusted rate, remaining term)- balance at reset
- the principal still owed when the fixed period ends
- remaining term
- total term − initial fixed period
This models a single adjustment to a rate you specify. A real ARM can adjust repeatedly against an index plus margin, bounded by periodic and lifetime caps — so treat the "after adjustment" figure as one scenario, not a ceiling.
Worked example
Using the example values — Loan Amount $300,000.00, Initial Rate 5%, Initial Fixed Period (yrs) 5, Rate After Adjustment 7%, Total Term (Years) 30 — the Adjustable Rate Calculator returns a Initial Payment of $1,610.46. It also reports Balance at Adjustment ($275,486.20), Payment After Adjustment ($1,947.08), Payment Change ($336.61).
Prefer your own numbers? Change any field above and this recomputes instantly.
Key terms
- ARM
- Adjustable-rate mortgage — a fixed introductory rate that later floats.
- Initial fixed period
- The years the starting rate is locked (the "5" in a 5/1 ARM).
- Rate reset / adjustment
- When and how the rate changes after the fixed period.
- Rate cap
- The limit on how much the rate can rise per adjustment and over the loan's life.
Frequently asked questions
What do numbers like 5/1 mean?
The first is the years the rate is fixed; the second is how often it adjusts afterward. A 5/1 ARM is fixed for five years, then adjusts yearly.
Could my payment rise more than shown?
Possibly. Real ARMs adjust against an index and can move each period up to a cap. This shows one adjustment to the rate you enter — check your loan's caps for the worst case.
Why choose an ARM?
The intro rate is usually lower than a comparable fixed rate — useful if you'll sell or refinance before it adjusts. The risk is being caught by higher rates if you don't.