Last updated October 13, 2026 · Report an error
An adjustable-rate mortgage starts with a fixed rate for an initial period, then switches to a new rate for the remainder of the loan — meaning your payment can jump (or drop) partway through, a genuinely different structure from a fixed-rate mortgage.
This calculator finds your initial payment, the remaining balance when the rate adjusts, and your new payment afterward.
How it works
Enter the loan amount, initial rate and period, adjusted rate, and total loan term. The calculator computes the initial payment over the full term at the initial rate, finds the remaining balance when the fixed period ends, then recomputes the payment on that balance at the adjusted rate over the remaining term.
- Enter loan amount.
- Enter initial rate (%).
- Enter initial fixed period (years).
- Enter adjusted rate after initial period (%).
- Enter total loan term (years).
- Click Calculate to see your results.
Examples
5/1 ARM example
A $400,000 loan with a 5.5% initial rate (fixed for 5 years) adjusting to 7% has an initial payment of about $2,271.16/month, then adjusts to about $2,613.97/month.
Who should use it
- Evaluating an ARM loan offer's payment before and after the initial fixed period.
- Comparing an ARM's total payment risk against a fixed-rate mortgage alternative.
Industry applications
- Mortgage lending and real estate
- Personal financial planning
Advantages
- Shows both the initial and post-adjustment payment together, not just one or the other.
- Calculates the exact remaining balance at adjustment using the closed-form amortization formula.
Limitations
- Models only a single rate adjustment — doesn't simulate multiple periodic adjustments over a longer ARM lifespan.
Common mistakes to avoid
- Budgeting only around the low initial ARM payment without planning for the payment change once the rate adjusts.
- Assuming the adjusted rate will stay the same as today's rates — actual future rates depend on the index the ARM is tied to and can't be predicted with certainty.
Best practices
- Model a range of possible adjusted rates (not just one guess) to understand the range of payments you might face after the initial fixed period ends.
Tips
- ARMs often make sense if you plan to sell or refinance before the fixed period ends — if you intend to stay in the home long-term, comparing the worst-case adjusted payment against a fixed-rate alternative is essential.