How to project an ARM reset
Compare the fixed-rate payment with the recast payment.
1
Enter the loan and initial rate
Use the amount borrowed and the promotional fixed rate.
2
Set the fixed period
Use the number of years before the first reset.
3
Add the adjusted rate
Try a realistic index forecast and the lifetime cap.
What does this tool do?
An adjustable-rate mortgage starts with a fixed rate, then resets against a market index. This calculator recasts the remaining balance at the new rate so you can see the payment step-up.
The Formula
New payment = Balance at reset × r ÷ [1 − (1 + r)^−remaining months]Frequently Asked Questions
What drives the new rate?
The reference index plus the lender margin, limited by periodic and lifetime caps. This tool takes the adjusted rate as an input.
Should I test the maximum rate?
Yes for planning. Using the lifetime cap as the new rate shows the worst-case payment under the loan terms.