Rate-reset scenarios

Adjustable-Rate Mortgage Calculator

See how mortgage payments could change after the initial fixed period. Compare an assumed index with the lowest and highest paths permitted by the caps you enter.

Your loan terms

Loan amount ($)Loan term (months)Initial annual interest rate (%)Initial fixed period (months)Adjustments every (months)Assumed index at every reset (%)Margin added to index (percentage points)First adjustment cap (percentage points)Subsequent adjustment cap (percentage points)Lifetime increase above initial rate (points)Lifetime rate floor (%)

A 5/6 ARM means 60 fixed months, then adjustments every 6 months; a 5/1 ARM normally adjusts every 12 months. Confirm your loan note. Caps are percentage-point changes, not percentages of the previous rate.

This model applies first and periodic caps equally to increases and decreases. The lifetime cap is the maximum increase above the initial rate; the separate floor is the minimum rate. A zero floor is only an example, not a typical loan promise. Enter the floor from your note; it must not exceed the initial rate in this model.

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Payment paths and total interest

Solid blue: assumed indexDashed green: best caseDotted red: worst case

Full-term modeled principal and interest
Scenario	Total interest	Total payments

Rate and payment at every reset

Initial period and subsequent payment periods
Payment months	Best-case rate	Best-case payment	Assumed rate	Assumed payment	Worst-case rate	Worst-case payment

How the scenarios work

During the fixed period all paths use the initial rate. The first reset applies to payment month fixed-period + 1. Each later reset occurs after the entered number of months. At every reset the payment is recalculated to amortize that path's remaining principal over the remaining term.

The assumed path targets the entered index plus margin at every reset, restricted by the first or periodic change cap, the lifetime ceiling, and the floor. The best-case path takes the largest permitted rate decrease at every reset until reaching the floor. The worst-case path takes the largest permitted increase until reaching initial rate plus lifetime cap. They are mathematical bounds under these assumptions, not statements about likely index movements.

For monthly rate r, balance B and remaining months n, payment = B × r / (1 − (1 + r)^(−n)); at zero interest, payment = B / n. Annual nominal rates are divided by 12. Calculations retain precision until display; lender rounding and actual reset dates may differ slightly.

Scope and limitations

Fully amortizing loans only: no interest-only periods, payment caps, negative amortization, extra payments, rate rounding increments, index lookback dates, carryover of unused rate increases, or different upward/downward adjustment caps. Taxes, insurance, mortgage insurance, fees and refinancing costs are excluded. This model permits a floor at or below the initial rate; notes with a higher post-reset floor require a different model. If the fixed period equals the entire loan term, there are no resets.

Check the cap structure, rate floor, index, margin and adjustment schedule in your loan note. References: CFPB: index and margin and CFPB: ARM rate caps. Reviewed October 5, 2026.