Adjustable-Rate Mortgage (5/1 & 7/1 ARM) Rate Reset & Cap Calculator

Compare initial teaser ARM payment against first-reset and lifetime cap payments.

Post-Reset Monthly ARM Payment
USD 3,074.74
Initial Teaser Monthly Payment USD 2,555.05
Monthly Payment Shock (+Δ) USD 519.69
Remaining Principal at Reset USD 416,072.72
Inputs
Amounts are treated in the selected currency; no foreign-exchange conversion is applied.
USD
Initial mortgage principal borrowed.
%
Initial fixed-period interest rate (%).
years
Initial fixed-rate period in years (e.g., 5 for 5/1 ARM).
%
Expected fully-indexed rate after reset (Index + Margin %).
years
Total mortgage amortization term in years.
Results & Graph
Post-Reset Monthly ARM Payment
USD 3,074.74
Initial Teaser Monthly Payment
USD 2,555.05
Monthly Payment Shock (+Δ)
USD 519.69
Remaining Principal at Reset
USD 416,072.72

Post-Reset Monthly ARM Payment

Graph 1 • Loan Principal Sensitivity Recalculates the domain equation across 50% to 150% of the primary input while holding other parameters constant.
0 USD 2.5k USD 5.0k USD 50%: 1,537.37 USD 1.5k 50% 75%: 2,306.06 USD 2.3k 75% 100%: 3,074.74 USD 3.1k 100% 125%: 3,843.43 USD 3.8k 125% 150%: 4,612.11 USD 4.6k 150%
Graph 2 • Primary & Supporting Metric Comparison Compares the primary output alongside supporting domain benchmarks.
Post-Reset Monthly ARM Payment USD 3,074.74 Initial Teaser Monthly Payment USD 2,555.05 Monthly Payment Shock (+Δ) USD 519.69 Remaining Principal at Reset USD 416,072.72
Graph 3 • Exact Output Table & Units Displays each calculated output in its exact domain unit.
Post-Reset Monthly ARM PaymentUSD 3,074.74Initial Teaser Monthly PaymentUSD 2,555.05Monthly Payment Shock (+Δ)USD 519.69Remaining Principal at ResetUSD 416,072.72
Summary: Initial payment is USD 2,555.05/mo for 5 years; after resetting to 7.5% on the USD 416,073.00 balance, payment rises to USD 3,074.74/mo.
Summary: Initial payment is USD 2,555.05/mo for 5 years; after resetting to 7.5% on the USD 416,073.00 balance, payment rises to USD 3,074.74/mo.
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Formula & Mathematical Methodology: ARM Rate Reset Mathematical Formula

RemainingBalancek = P × (1+r₀)N − (1+r₀)k(1+r₀)N − 1
NewPMT = PMT(RemainingBalancek, rreset, N − k)
RemainingBalance_k = P × [(1+r₀)^N − (1+r₀)^k] / [(1+r₀)^N − 1]; NewPMT = PMT(RemainingBalance_k, r_reset, N − k)
  • loanPrincipal: Loan Principal (USD)
  • initialTeaserRatePct: Initial Teaser Rate Pct (%)
  • fixedPeriodYears: Fixed Period Years (years)
  • resetRatePct: Reset Rate Pct (%)
  • totalTermYears: Total Term Years (years)

Rounding: Intermediate calculations retain full IEEE-754 floating-point precision; displayed currency and ratios round to 2 decimal places.

Worked Example: Benchmark Scenario: ARM Rate Reset

Compare initial teaser ARM payment against first-reset and lifetime cap payments.

  1. Enter the portfolio, option, lease, or corporate balance-sheet inputs.
  2. Evaluate the core equation: RemainingBalance_k = P × [(1+r₀)^N − (1+r₀)^k] / [(1+r₀)^N − 1]; NewPMT = PMT(RemainingBalance_k, r_reset, N − k).
  3. Inspect the primary valuation output, risk metrics, and 3 visual SVG graphs.
Result: Computes ARM Rate Reset using RemainingBalance_k = P × [(1+r₀)^N − (1+r₀)^k] / [(1+r₀)^N − 1]; NewPMT = PMT(RemainingBalance_k, r_reset, N − k).

Frequently Asked Questions

How does the Adjustable-Rate Mortgage (5/1 & 7/1 ARM) Rate Reset & Cap Calculator calculate results?

It evaluates RemainingBalance_k = P × [(1+r₀)^N − (1+r₀)^k] / [(1+r₀)^N − 1]; NewPMT = PMT(RemainingBalance_k, r_reset, N − k) directly in your browser and updates the three domain SVG visualizations immediately as you adjust any input.

Can I compare multiple investment or financing scenarios side by side?

Yes. Click "Compare (0/3)" in the results toolbar to pin up to three scenarios side by side.

Are my financial numbers kept private?

Yes. All calculations run 100% locally in your browser with zero server uploads.

Finance & Investing · Real Estate & Home Loans

Adjustable-Rate Mortgage (5/1 & 7/1 ARM) Rate Reset & Cap Calculator: inputs, method, and how to read the result

Compare initial teaser ARM payment against first-reset and lifetime cap payments.

Choose inputs for the case you are checking

The defaults are illustrative. Replace them with values for your case and keep the units shown beside each field.

  • Display Currency: Amounts are treated in the selected currency; no foreign-exchange conversion is applied.
  • Loan Principal: Initial mortgage principal borrowed.
  • Initial Teaser Rate Pct: Initial fixed-period interest rate (%).
  • Fixed Period Years: Initial fixed-rate period in years (e.g., 5 for 5/1 ARM).

What the calculation includes

With the default values shown, Post-Reset Monthly ARM Payment is USD 3,074.74. The calculation follows ARM Rate Reset Mathematical Formula; the formula and variable definitions above show how the inputs combine.

One-input check: With the other defaults held constant, changing Loan Principal from 450,000 USD to 495,000 USD changes Post-Reset Monthly ARM Payment from USD 3,074.74 to USD 3,382.21. This is a comparison inside the calculator's stated model, not a prediction.

Where to use caution

  • Uses standard quantitative finance, GAAP/IFRS operating ratios, and continuous/periodic compounding conventions.
  • For educational and analytical modeling only; consult a licensed CPA, CFA, or fiduciary advisor before executing tax or derivative transactions.

Scope: Global Financial & Corporate Valuation Standard Check the assumptions and limitations against your situation before relying on the estimate.

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