How the 10/1 ARM Calculator Works
We compute your monthly payment during the 10-year fixed span and simulate annual resets using your assumptions: index drift, margin (informational), and caps. Then we surface the projected payment after the first reset and a complete amortization schedule.
Disclaimer: Results are estimates for education and planning; lender calculations may differ.
What Is a 10/1 ARM?
A 10/1 ARM offers a fixed rate for 10 years followed by annual adjustments. The initial rate is often below a 30-year fixed, which can reduce early payments for borrowers who may sell, move, or refinance before or soon after the first reset.
Understanding Rate Caps
- Initial Cap: Max change at the first adjustment.
- Periodic Cap: Max change at each subsequent yearly reset.
- Lifetime Cap: Max cumulative increase over the life of the loan.
Pros and Cons of a 10/1 ARM
- Pros: lower initial rate, lower payments for a full decade, potential savings.
- Cons: payment uncertainty after 10 years; exposure to rising rates.
10/1 ARM vs. 30-Year Fixed
A 30-year fixed prioritizes certainty; a 10/1 ARM prioritizes a lower initial payment for a decade, with risk of higher payments later. Choose based on time horizon and risk tolerance.
Inputs for the Calculator
- Home price & down payment (amount or %)
- Loan term (years), initial rate (10-year fixed), index drift, and caps
- Optional: taxes, insurance, HOA; extra principal
Understanding Your Results
See your initial monthly payment, projected post-adjustment payment, total interest, and amortization schedule. Use the yearly chart to visualize costs and balance over time.
Frequently Asked Questions
Can I refinance before the first reset?
Yes. Many borrowers refinance around year 9–11 to lock a new rate.
How are payments recalculated after 10 years?
Each year, the payment is recomputed based on the new rate, remaining balance, and remaining term, subject to your caps.