Mortgage Adjustable Rate Calculator

We compute payments using standard amortization formulas (level payment annuity) and apply contractual cap rules in this order: compute index + margin, apply the initial adjustment cap, then enforce the lifetime cap relative to the initial rate. Periodic caps are presented but this tool models only the first adjustment as a representative scenario.

Numeric computation follows IEEE-754-like floating point conventions for reproducibility; results are rounded to typical consumer presentation (currency to cents, rates to two decimal places) but internal calculations maintain higher precision. Data handling and UI controls are built with NIST-recommended guidance for input validation and secure defaults.

This tool provides a transparent estimate of initial and first-adjusted payments for ARMs, using index + margin and common cap rules. It is intended for planning and comparison, not as a substitute for lender-provided TIL/LE disclosures.

For legally binding figures, rely on official loan documents. The tool follows standard numeric practices and cites standards for reproducibility and secure input handling.

Example 1: $300,000, 30-year term, 5-year initial period, initial APR 3.25%, index 2.50%, margin 2.25%, initial cap 2.0%, lifetime cap 5.0%: Initial payment is computed from 3.25% APR. Raw adjusted APR = 4.75% (index + margin). First adjustment limited by initial cap to max 5.25% and min 1.25% so 4.75% is allowed; lifetime cap also permits it. Payment after adjustment is computed with 4.75% over remaining months.

Example 2: Use the comparison mode to see how a 30-year fixed-rate at 4.0% compares to the ARM's initial payment. The result highlights monthly savings or extra cost before considering future adjustments.