What different adjustable rate mortgage (ARM) payment calculator types exist?


An adjustable rate mortgage (ARM) payment calculator is very useful when comparing different ARM loan programs. Also, comparing an ARM to FRM is very useful - fixed rate mortgages have higher rates and monthly payments than the ARM starting monthly payments and many hybrid ARMs offer a lot of stability and lower rates than FRMs, which can be very attractive to consumers.

The web offers many ARM payment comparison calculator tools, some of which can be pretty useful to determine how your ARM payments are going to change over the years, using rate predictions, as well.

ARM comparison calculators should be used not only to determine monthly payments but the rate of ARM payment increase, too.

Different Adjustable Rate Mortgage (ARM) Programs and Calculators

  1. Pure ARM - and adjustable rate mortgage loan with fixed low interest rate for 1 to 3 months; the rate then begins to adjust according to the index they are tied to.
  2. Hybrid ARM - very popular adjustable rate mortgages with very attractive features. Fixed period offered is usually 1, 2, 3, 5, 7 and 10 years. The rate then adjusts once or twice a month. They are often preferred by borrowers who plan to refinance in several years. The longer the fixed period, the higher the rate.
  3. Interest-Only ARM - only interest payments are due for up to 10 years. The loan is then scheduled to amortize fully for the remaining years of the mortgage term, or refinanced.
  4. Option ARMs - the most popular mortgage programs as of recent years. They offer a very flexible loan repayment schedule:
    • Minimum payment with negative amortization;
    • Interest-only payment;
    • Fully amortizing payments with choice of 15 or 30 years.
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