GoFlexi LogoGoFlexi

ARM Calculator with Extra Payments

Calculate the full life of an adjustable-rate mortgage. Type your expected adjustment per period and the rate at every reset is filled in for you — then edit any row to model what you actually expect. Layer extra principal payments on top to see how fast you can pay it off, even if rates rise.

ARM Structure

5/6 ARM = 5, 7/6 ARM = 7, 10/6 ARM = 10

5/1 ARM = 1, 5/6 ARM = 0.5

Standard ARMs limit each adjustment. Off by default — turn on to model a real ARM disclosure.

%
YearAdjustmentAdjusted rateEffective
Year 5#15.500%
Year 5.5#25.500%
Year 6#35.500%
Year 6.5#45.500%
Year 7#55.500%
Year 7.5#65.500%

Every row is taken at face value. Edit individual rows to override the expected adjustment.

Model the effect of paying extra toward principal.

Results
Initial Payment
$1,817
Fixed period
Peak Payment
$1,817
Peak rate: 5.50%
at% over the same term
Fixed-rate comparison @ 6.5%
Monthly payment
$2,023
Total interest
$408,142
ARM vs fixed
−$74,049
Same loan amount, term, and extra payments — only the rate differs. Negative = ARM costs less interest with the rate path you set; positive = ARM costs more.
Loan Amount
$320,000
Total Interest
$334,093
Payoff Date
Oct 2056

More ways to model this loan

This page runs one schedule with one extra-payment plan. The GoFlexi calculator opens up the parts it holds fixed — the extra can change from month to month, the term can carry a balloon or an interest-only opening, and the loan itself can be wrapped and sold on terms.

Edit the extra month by month
Type a different amount into any single row of the schedule, instead of one recurring figure for the whole term
Balloon and interest-only starts
Change the shape of the term, not just the payment — a balloon at year seven, or an interest-only opening stretch
Wrap a new note around this loan
Leave this mortgage in place and sell on terms over the top of it — both schedules, and the spread between them
PDF export
The whole schedule and summary as a document you can hand to someone

Free with an account

Compare two plans
One extra-payment plan against another
Lessons
How wraps, balloons and note math work

About This ARM Calculator with Extra Payments

This calculator models an adjustable-rate mortgage (ARM) the way you actually think about one: a fixed-rate period at the start, then a series of resets where the rate can change. Set the initial fixed period and adjustment frequency, type the rate you expect at each reset to move by, and the table fills in. Want to model a different scenario at year seven? Edit that row directly. Every change re-amortizes the remaining balance over the remaining term at the new rate, which is what real ARMs do at every reset.

Where this tool earns its keep is the extra-payments layer. Add a recurring monthly extra, a yearly lump sum, or any number of one-time payments and watch the schedule recompute live. Extra principal shrinks the balance every later reset applies to, so whichever way rates move, less of the loan is exposed to them. The calculator assumes you keep paying at least your original payment, which turns the extra principal into an earlier payoff. On a real ARM the lender recalculates the payment on the lower balance at the next reset, so the earlier payoff only happens if you keep paying the old amount on purpose. It's how some borrowers use an ARM whose starting rate is below the fixed-rate alternative: take the discount, pay principal down hard, and sell, refinance, or pay off the loan before the resets have much balance to work on.

If you're modeling a real lender's ARM with a 2/1/5 or 5/1/5 cap structure (the caps on Fannie Mae's 5/6 and 7/6 or 10/6 SOFR ARMs), flip on the advanced caps option to add per-adjustment and lifetime limits. For most users — comparing scenarios, modeling an existing ARM, or stress-testing what happens if rates rise — the default rate path is faster and clearer. For wrap mortgages, balloon exits, tax-benefit modeling, and full deal-structuring against a fixed loan, check out the GoFlexi calculator.

Related calculators

Mortgage Calculator with Extra Payments

Calculate monthly mortgage payments and model extra principal payments to see months and interest saved.

Rent vs Buy Calculator

Compare the full cost of renting vs buying in today's dollars and find your breakeven year.

Underwater Mortgage Calculator

Calculate how much you could save by letting a buyer take over your underwater mortgage.

Frequently Asked Questions

What is a 5/1 ARM, and what is a 5/6 ARM?

Both are adjustable-rate mortgages with a fixed rate for the first 5 years. The second number is how often the rate resets after that. A 5/1 ARM resets once a year. A 5/6 ARM resets every 6 months. ARMs that Fannie Mae and Freddie Mac buy now come only in 6-month versions (3/6, 5/6, 7/6, and 10/6), indexed to the 30-day average SOFR, which replaced LIBOR. Older loans, and some ARMs that lenders keep on their own books, are still 5/1s. To model either here, set the initial fixed period to 5. Then set Adjusts Every to 1 for a 5/1, or 0.5 for a 5/6. Your note says which one you have.

How is the new rate set at each ARM reset?

The standard Fannie Mae/Freddie Mac ARM note spells it out. The lender takes the index value published 45 days before the change date, adds your margin, and rounds the result to the nearest one-eighth of a point. Then it applies your caps. The margin is fixed in your note, and on loans sold to Fannie Mae or Freddie Mac it's between 1 and 3 percentage points. For example, with the index at 4.25% and a 2.75% margin, the new rate is 7.00%. If your start rate was 5.5% and your first-reset cap is 2 points, the most it could reset to is 7.5%, so 7.00% goes through unchanged. This calculator lets you type the rate you expect at each reset instead of forecasting the index. Turn on caps to have it clamp your inputs the way the note would.

How do I model what I expect rates to do?

Type a number into the Expected adjustment per period field. If you expect rates to rise about a quarter-point per reset, type 0.25 and the table fills with rates rising 0.25% at each one. For flat rates type 0, and for falling rates type a negative number. Then edit any row directly to model a specific event, such as a one-time spike at year seven. The amortization schedule and payment column update as you edit.

How does an ARM payment change at adjustment?

The standard ARM note says that at each change date the lender sets the payment that would pay off the unpaid principal by the maturity date at the new rate in substantially equal payments. In other words, the remaining balance is re-amortized over the remaining term. That makes the payment jump larger than the rate change alone suggests. On a $320,000, 30-year loan at 5.5%, the payment is about $1,817. At the first reset after year 5, about $295,900 is still owed with 25 years left. A 2-point jump to 7.5% raises the payment to about $2,186, roughly $370 a month more. This calculator recalculates the payment the same way at every reset.

Should I take an ARM or a fixed-rate mortgage?

Compare the size of the discount with how long you'll keep the loan. An ARM is worth it when its starting rate is meaningfully below the fixed rate and you expect to sell, refinance, or pay the loan down heavily before the resets matter. When the gap is small, a fixed rate usually wins, because you give up little to remove the risk. With the calculator's defaults, $320,000 at a 5.5% ARM against a 6.5% fixed rate, the ARM payment is about $206 a month lower, or roughly $12,300 over the 5-year fixed period. That's the cushion the resets have to eat through. Enter a fixed rate in the comparison box above to see both payments, both lifetime interest totals, and the difference under your rate path.

Do extra principal payments help on an ARM?

Yes. Every dollar of principal you pay early stops accruing interest at every rate the loan charges from then on, whatever those rates turn out to be. On an ARM it also cuts your exposure to the resets. Each new rate applies to a smaller balance, so if rates rise, the payment jump is smaller, and a large enough prepayment can retire the loan before later resets arrive. If rates fall instead, prepaying still saves interest, just less per dollar than it would at a higher rate. One thing to know about how real ARMs handle it: the standard ARM note says a partial prepayment may lower your monthly payment after the next change date, because the new payment is calculated on whatever you actually owe. It doesn't shorten the term by itself. This calculator assumes you keep paying at least the payment you'd have owed without the extras, which turns all of the prepayment into an earlier payoff. Turn on extra payments above to see months and interest saved under your rate scenario.

How is a 7-year ARM different from a 10-year ARM?

A 7-year ARM (7/1 or 7/6) keeps its starting rate for 7 years, and a 10-year ARM for 10, before resets begin. The longer fixed period buys you more years of certainty, and lenders price each product separately, so compare actual quotes. The cap structure differs too. On ARMs sold to Fannie Mae, the 7/6 and 10/6 let the first reset move up to 5 points, while the 5/6 caps it at 2. So a 7/6 or 10/6 can reach its lifetime ceiling at the very first reset. Set the initial fixed period to 7 or 10 and enter your note's caps to see the real range of outcomes.

How do the caps on a real ARM disclosure work?

Caps are written as three numbers. On a 2/1/5 structure, which is the one on Fannie Mae's 5/6 SOFR ARM, the first reset can move the rate at most 2 points from the start rate, each later reset at most 1 point, and the rate can never go more than 5 points above where it started. On a 5.5% start that sets a ceiling of 10.5%. The limits work in both directions, so they also slow how fast the rate can fall. On Fannie Mae's standard plans the lifetime floor is the margin, so the rate never drops below it no matter how low the index goes. Turn on the caps option and the table shows the rate you typed next to the rate the loan would actually charge after the caps apply.

Can I use this calculator for a 5/5 ARM or other variants?

Yes. A 5/5 ARM is fixed for 5 years and then resets every 5 years. Set the initial fixed period to 5 and Adjusts Every to 5. The same two fields cover a 3/1 (3 and 1), a 5/6 (5 and 0.5), and a 10/6 (10 and 0.5). Match them to your loan documents.

What is the difference between an ARM and a loan with an escalating interest rate?

An ARM's rate follows a market index, so nobody knows the future rate at closing. Only the caps are known. An escalating rate, sometimes used in seller financing, steps up on a schedule written into the note, such as 4% for two years, then 5%, then 6%, so every future rate is known on day one. That's often meant as gentle pressure on the buyer to refinance before the loan gets expensive. Both can raise the payment over time, but an escalating rate has no index risk, while an ARM's risk depends on the market. The GoFlexi calculator models both.

Need More Powerful Calculations?

Unlock wrap mortgages, balloon payment scheduling, amortization tables, tax benefit estimates, and more with GoFlexi's full-featured seller finance calculator.

Free plan — no credit card
14-day Pro trial for new accounts
Unlimited calculations
Cancel anytime