# An ARM Payment Calculator

If you have an adjustable-rate mortgage (ARM) and want to project how much your monthly mortgage payment might be the next time your loan is adjusted or reset, an ARM payment calculator can help. This type of calculator, also called an ARM calculator or an adjustable rate calculator, can also be helpful if you want to buy a home or refinance your mortgage and need to compare the projected monthly payment on an ARM to that of a fixed-rate mortgage.

## How an ARM Payment Calculator works

An ARM payment calculator works in much the same way as other types of mortgage payment calculators. To use the ARM calculator, you just enter some data about your existing or potential home loan. The calculator performs the calculations and then gives you the answer. In the case of an ARM calculator, you'll need to enter the loan amount, interest rate and term of the adjustable-rate mortgage. Keep in mind that the loan amount isn't equal to the purchase price or value of the home, but rather the actual amount that you owe or want to borrow. That's usually the case for mortgage calculator tools in general.

The interest rate that you'll use in the ARM calculator likely will be the initial rate on your mortgage, but keep in mind that the interest rate on an ARM is, by definition, adjustable. That means your initial rate and payment could change due to adjustable rates. You can enter different adjusted rates into the ARM payment calculator to find out what your payment would be.

## ARM Payment Calculator uses mortgage terms

An adjustable-rate mortgage is a bit more complicated than a mortgage with a fixed interest rate, so you'll need to enter some additional details to get a good result from an ARM payment calculator. The additional details that you'll need to enter into the calculator are the duration of the initial interest rate, index, margin, expected amount of interest adjustment and lifetime cap. If you don't know this information, refer to your loan documents or monthly statement or call your lender. The expected adjustment is just an estimate, so you might want to use the ARM calculator to run a few different scenarios.

If you want to calculate a payment that includes property taxes and homeowner's insurance as well as principal and interest, just enter that information into the calculator. If you don't have that information, don't worry: a good ARM payment calculator can still calculate your monthly payment without those costs. An ARM payment calculator typically doesn’t include the added cost of mortgage insurance, but you can ask your lender to estimate that cost for you.

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