ARM Mortgage Payment Calculator

Finance

Estimate the monthly payment on an adjustable-rate mortgage (ARM) before and after the rate adjusts. Enter the loan amount, the initial fixed rate, the rate you expect after the adjustment, and the loan term. The calculator amortises the balance at each rate so you can see how much your payment could rise when the introductory period ends.

Formula

Payment = P × [i(1+i)ⁿ] ÷ [(1+i)ⁿ − 1], computed at the initial rate and again at the adjusted rate
  • Each payment is found with the standard fully-amortising mortgage formula, where i is the monthly rate (annual rate ÷ 12) and n is the number of months.
  • The initial payment uses the introductory rate; the adjusted payment re-applies the same formula at the higher (or lower) rate for comparison.
  • This is a simplified view: it assumes a single rate change over the full term and ignores rate caps, margins, index movements and fees that real ARMs apply.
  • The monthly increase shows the potential payment shock — how much more you would owe each month after the adjustment.

Example: 5,000,000 loan, 4% then 5%, 30 years

Inputs
  • Loan Amount: 5000000
  • Initial Rate (% per year): 4
  • Adjusted Rate (% per year): 5
  • Loan Term (years): 30

On a 5,000,000 loan over 30 years, the payment at 4% is about 23,871 per month, while at 5% it rises to about 26,841 — roughly 2,970 more each month after the rate adjusts.

Frequently asked questions

What is an adjustable-rate mortgage?
An ARM is a home loan whose interest rate is fixed for an introductory period and then adjusts periodically based on a market index plus a margin, so the monthly payment can change over time.
How does this calculator estimate the adjusted payment?
It amortises the loan twice — once at the initial rate and once at the adjusted rate — using the standard mortgage payment formula, then shows the difference.
Why is my real ARM payment different?
Actual ARMs use periodic and lifetime rate caps, a margin over a moving index, and may recalculate over the remaining term. This tool uses one fixed adjustment for a simple before-and-after comparison.
What is payment shock?
It is the jump in your monthly payment when the introductory fixed period ends and the rate resets higher. The monthly increase figure illustrates that jump.
How do I enter the interest rates?
Enter each annual rate as a plain percentage number — for example 5 for 5%. The calculator divides by 12 to get the monthly rate.