Use this calculator to determine the Annual Percentage Rate (APR) of your Adjustable Rate Mortgage (ARM). Knowing your APR can help you compare different ARMs with different fees and terms.
Loan information: |
Adjustments: |
Closing Costs: |
Total Payments KJE1 |
Principal Balance by Year |
This calculator shows a "fully amortizing" ARM, which is the most common type of ARM. The monthly payment is calculated to pay off the entire mortgage balance at the end of a 30-year term. After the initial period, the interest rate and monthly payment adjust at the frequency specified. The amount an ARM can adjust each year, and over the life of the loan, are typically capped. Below is a list of common ARMs.
| ARM Type | Months Fixed |
|---|---|
| 10/1 ARM | Fixed for 120 months, adjusts annually for the remaining term of the loan. |
| 7/1 ARM | Fixed for 84 months, adjusts annually for the remaining term of the loan. |
| 5/1 ARM | Fixed for 60 months, adjusts annually for the remaining term of the loan. |
| 3/1 ARM | Fixed for 36 months, adjusts annually for the remaining term of the loan. |
| 10/6 month ARM | Fixed for 120 months, adjusts every six months for the remaining term of the loan. |
| 7/6 month ARM | Fixed for 84 months, adjusts every six months for the remaining term of the loan. |
| 5/6 month ARM | Fixed for 60 months, adjusts every six months for the remaining term of the loan. |
| 3/6 month ARM | Fixed for 36 months, adjusts every six months for the remaining term of the loan. |
Original or expected balance for your mortgage.
Initial annual interest rate for this mortgage.
The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.
The current interest rate of the index used to calculate the interest rate on this Adjustable Rate mortgage. The current index rate plus the margin on that rate produces the Fully Indexed Rate that is used to calculate the APR for this mortgage.
The interest rate percentage above the index, or the 'margin', used to calculate the Fully Indexed Rate.
Monthly principal and interest payment (PI) based on your beginning balance and starting interest rate.
The percent of your loan charged as a loan origination fee. For example, a 1% fee on a $120,000 loan would cost $1,200.
Total number of "points" purchased to reduce your mortgage's interest rate. Each "point" costs 1% of your loan amount. As long as the points paid are not a broker's commission, they are considered tax-deductible in the year that they were paid.
Any other fees that should be included in the APR calculation. These fees can vary by lender, but at a minimum usually includes prepaid interest.
A standard calculation used by lenders. It is designed to help borrowers compare different loan options. For example, a loan with a lower stated interest rate may be a bad value if its fees are too high. Likewise, a loan with a higher stated rate with very low fees could be an exceptional value. APR calculations incorporate these fees into a single rate. You can then compare loans with different fees, rates or different terms.
This is the highest interest rate allowed by your mortgage. Your actual interest rate will not be adjusted above this rate.
This is the number of months that the interest rate is fixed. After this period, the interest rate will be subject to rate adjustments. If you enter zero in this field, the tool assumes that the rate will begin making adjustments after initial period of time between adjustments has passed. If any number other than zero is entered, the first adjustment will take place at that time, and adjustments will happen at the frequency entered in the 'months between adjustments' field.
The amount you believe that your mortgage's interest rate will change. This amount will be added to or subtracted from your interest rate.
The number of payment periods between potential adjustments to your interest rate. The most common is 12 months, which means your payment could change at most once per year. Loans using the SOFR benchmark have six months between adjustments. The SOFR benchmark is based on what U.S. financial institutions pay each other for overnight loans. It is often used as a replacement for the LIBOR benchmark which is no longer used.
Total of all monthly payments over the full term of the mortgage. This total payment amount assumes that there are no prepayments of principal.
Total of all interest paid over the full term of the mortgage. This total interest amount assumes that there are no prepayments of principal.