See the ARM's low starting payment and what it becomes if the rate adjusts up.
An ARM calculator estimates the payment on an adjustable-rate mortgage during its low fixed intro period and after the rate adjusts, so you can see the payment shock before it happens.
An adjustable-rate mortgage fixes the rate for an initial period, commonly five, seven, or ten years, then lets it move with the market up to periodic and lifetime caps. The intro rate is usually below a comparable fixed loan, which lowers the early payment. The uncertainty is what the payment becomes once it can adjust.
ARMs suit borrowers confident they'll sell or refinance before the rate adjusts, or who can absorb a higher payment later. If you plan to stay long-term or want certainty, a fixed rate is usually safer. Always check the caps and model the worst-case adjusted payment before choosing.
The first number is the years the rate is fixed; the second is how often it adjusts afterward, annually for a 5/1 or 7/1 ARM.
Up to the loan's periodic and lifetime caps. Enter the capped rate above to see the worst-case payment before deciding.
Its intro rate and payment are usually lower, but that can change when the rate adjusts. It's cheaper only if you exit before or can afford the higher payment.
See the exact formula and a worked example on our methodology page.