Mortgage

Interest-only ARM calculator

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Interest-only ARM mortgages can provide very low monthly payments, however, you are not paying off any principal during the interest-only period. Use this interest-only ARM calculator to examine an interest-only mortgage.

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Definitions

Interest Only Adjustable Rate Mortgage (ARM): This calculator shows an Interest Only ARM. The length of the loan is 30 years, with the initial interest rate fixed for the interest only payment period. After the fixed interest rate period has passed, the interest rate and payment adjusts at the frequency specified and the loan is recast to fully amortize over the remaining term of the loan.

Interest Only ARM Mortgage Options
ARM Type	Months Fixed
30 year fixed	Interest only payments at a fixed rate for 15 years. After 15 years, the loan is recast to fully amortize the outstanding balance over the remaining 15 year term of the loan.
10/1 ARM	Interest only payments at a fixed rate for 10 years. After 10 years, the loan is recast to fully amortize the outstanding balance over the remaining 20 year term of the loan.
7/1 ARM	Interest only payments at a fixed rate for 7 years. After 7 years, the loan is recast to fully amortize the outstanding balance over the remaining 23 year term of the loan.
5/1 ARM	Interest only payments at a fixed rate for 5 years. After 5 years, the loan is recast to fully amortize the outstanding balance over the remaining 25 year term of the loan.
3/1 ARM	Interest only payments at a fixed rate for 3 years. After 3 years, the loan is recast to fully amortize the outstanding balance over the remaining 27 year term of the loan.

Mortgage amount: Original or expected balance for your mortgage.
Starting interest rate: Initial annual interest rate for this mortgage.
Starting monthly payment: Monthly principal and interest payment (PI) based on your beginning balance and starting interest rate.
Total payments: Total of all monthly payments over the full term of the mortgage. This total payment amount assumes that there are no prepayments of principal.
Total interest: Total of all interest paid over the full term of the mortgage. This total interest amount assumes that there are no prepayments of principal.
Months rate is fixed: This is the number of months that the interest rate is fixed. After this period, the interest rate will be subject to rate adjustments.
Months between adjustments: The number of payment periods between potential adjustments to your interest rate. The most common is 12 months, which means your payment could change at most once per year.
Expected adjustment: The amount you believe that your mortgage's interest rate will change. This amount will be added to or subtracted from your interest rate.
Interest rate cap: This is the highest interest rate allowed by your mortgage. Your actual interest rate will not be adjusted above this rate.

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

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30 yr fixed average
4.01%

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Mortgage Overnight Averages

Product	Rate	+/-	Last week
30 yr fixed mtg	4.01%		4.04%
15 yr fixed mtg	3.11%		3.18%
5/1 ARM	2.82%		2.88%
30 yr fixed mtg refi	4.00%		4.03%

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