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Option ARM Calculator

Enter your option ARM terms

$
%

Sets the first minimum payment.

mo
%

The rate interest actually accrues at once the start rate ends.

% a year

Most the minimum payment can rise at each yearly reset.

Reaching it forces an early recast.

When the payment must become fully amortizing even if the cap is not reached.

More options
pts

For example 0.5 if you expect the index to rise half a point a year.

%

Paying the minimum

First minimum payment

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Recast

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Payment shock at recast

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Highest loan balance

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Deferred interest added

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Total interest

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Figures assume you always make the minimum payment.

Option ARMs are now rare

Since January 10, 2014, the ability-to-repay rule in Regulation Z (12 CFR 1026.43) bars a loan whose payments can increase the principal from being a qualified mortgage, and requires lenders to judge whether you can afford the fully amortizing payment on the largest balance negative amortization could reach, at the fully indexed rate. Few lenders still offer these loans.

Your payment choices each month

Payment optionMonthly paymentEffect on the balance

Minimum, interest-only and full payments compared

If youFirst paymentPayment in year 2Balance before recastHighest paymentTotal interestTotal paid

Year-by-year schedule paying the minimum

The balance grows while the minimum payment is below the interest, until the recast resets the payment to fully amortizing.

YearRateMonthly paymentPaid in the yearInterest chargedDeferred interestEnding balanceBalance vs loan

Results are estimates for educational purposes and are not financial, tax or legal advice.

Follow a payment-option ARM month by month: how a minimum payment below the interest grows the balance, when the negative-amortization cap or scheduled recast resets the payment, and how big the jump is. The free amortization calculator is free to use with no sign-up, and works on desktop and mobile.