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Interest Only ARM Calculator

Interest only mortgages can provide you with very low monthly payments, however you are not paying off any principal during the interest only period. Use this calculator to examine an interest only mortgage.

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Definitions

Interest Only Adjustable Rate Mortgage (ARM)
This calculator shows an Interest Only ARM. The length of the loan is 30 years, with the initial interest rate fixed for the interest only payment period. After the fixed interest rate period has passed, the interest rate and payment adjusts at the frequency specified and the loan is recast to fully amortize over the remaining term of the loan.

Interest Only ARM Mortgage Options
ARM TypeMonths Fixed
30 year fixedInterest only payments at a fixed rate for 15 years. After 15 years, the loan is recast to fully amortize the outstanding balance over the remaining 15 year term of the loan.
10/1 ARMInterest only payments at a fixed rate for 10 years. After 10 years, the loan is recast to fully amortize the outstanding balance over the remaining 20 year term of the loan.
7/1 ARMInterest only payments at a fixed rate for 7 years. After 7 years, the loan is recast to fully amortize the outstanding balance over the remaining 23 year term of the loan.
5/1 ARMInterest only payments at a fixed rate for 5 years. After 5 years, the loan is recast to fully amortize the outstanding balance over the remaining 25 year term of the loan.
3/1 ARMInterest only payments at a fixed rate for 3 years. After 3 years, the loan is recast to fully amortize the outstanding balance over the remaining 27 year term of the loan.
Mortgage amount
Original or expected balance for your mortgage.

Starting interest rate
Initial annual interest rate for this mortgage.

Starting monthly payment
Monthly principal and interest payment (PI) based on your beginning balance and starting interest rate.

Total payments
Total of all monthly payments over the full term of the mortgage. This total payment amount assumes that there are no prepayments of principal.

Total interest
Total of all interest paid over the full term of the mortgage. This total interest amount assumes that there are no prepayments of principal.

Months rate is fixed
This is the number of months that the interest rate is fixed. After this period, the interest rate will be subject to rate adjustments.

Months between adjustments
The number of payment periods between potential adjustments to your interest rate. The most common is 12 months, which means your payment could change at most once per year.

Expected adjustment
The amount you believe that your mortgage's interest rate will change. This amount will be added to or subtracted from your interest rate.

Interest rate cap
This is the highest interest rate allowed by your mortgage. Your actual interest rate will not be adjusted above this rate.

Information and interactive calculators are made available to you as self-help tools for your personal independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.