Mortgage Variable Rate Calculator
This calculator estimates payments for variable-rate mortgages (ARMs) that start with a fixed introductory period and then adjust periodically based on an index plus a lender margin. It models initial monthly payments, projected outstanding balance at the end of the fixed period, and an estimated payment after the first adjustment using user-provided caps and current index assumptions.
Results are estimates intended for planning and comparison. They do not replace official loan disclosures. Use conservative inputs and review your loan contract for the exact index, margin, adjustment method, and cap schedule.
Standard adjustable-rate mortgage: fixed introductory period, then periodic rate adjustments based on an index + margin, subject to caps.
Inputs
Results
Initial monthly payment (P&I)
$1,305.62
Balance at end of initial period
$267,920.27
Estimated post-adjustment rate
4.75%
Estimated monthly payment after adjustment (P&I)
$1,527.46
| Output | Value | Unit |
|---|---|---|
| Initial monthly payment (P&I) | $1,305.62 | USD |
| Balance at end of initial period | $267,920.27 | USD |
| Estimated post-adjustment rate | 4.75% | % |
| Estimated monthly payment after adjustment (P&I) | $1,527.46 | USD |
Visualization
Methodology
We compute the initial monthly payment using the standard amortizing loan formula with the initial APR converted to a monthly decimal rate. Remaining balance after the initial period is derived from the cumulative amortization formula.
To estimate a post-adjustment rate we add the supplied index and margin, then apply the periodic cap to limit the change from the prior rate. The estimated post-adjustment payment is computed by re-amortizing the outstanding balance over the remaining term at that capped rate.
This tool models the first adjustment scenario only. It does not simulate multi-period stochastic index paths, prepayment behavior, escrow, taxes, insurance, fees, or special lender-adjustment rules (for example, rate floors, negative amortization schedules, or payment recast features).
Further resources
Expert Q&A
Is this exact to the offer my lender gave me?
No. This calculator produces estimates based on the inputs you provide. Your loan agreement and official disclosures from your lender define the exact index, margin, cap schedule, rounding rules, and payment calculation. Use those documents for binding figures.
Does the tool simulate multiple future adjustments?
No. The tool estimates the first post-introductory adjustment using a single index snapshot plus margin and the specified caps. It does not forecast future index changes or compound multiple adjustment periods.
What level of accuracy can I expect?
Results are numerical estimates. For implementation and testing practices, we follow guidance consistent with industry standards for calculation integrity and reproducibility. Users should treat results as indicative, not definitive. See the citations for relevant technical standards and security guidance.
Can I model interest-only payments or extra principal?
The form allows selecting interest-only versus fully amortizing behavior and entering extra monthly principal. Interest-only selections change conceptual payment types; verify with your lender whether IO periods or extra payments are permitted without penalty.
Sources & citations
- NIST — Computer Security & Reproducible Methods — https://www.nist.gov
- ISO — Standards for Financial and Software Quality — https://www.iso.org
- IEEE — Best practices for numerical accuracy and software engineering — https://www.ieee.org
- OSHA — Operational safety and workplace guidance — https://www.osha.gov
- Consumer finance guidance (non-exhaustive): general disclosures and shopping for a mortgage — https://www.consumerfinance.gov