Adjustable-Rate Loan (ARM) Calculator 🔁

Simulate the potential payment changes and worst-case scenario for a **Hybrid ARM** (e.g., 5/1, 7/1) given the initial rate, adjustment frequency, and rate caps.

ARM Parameters (Worst-Case Simulation)

Loan Principal ($):

Initial Fixed Rate (% Annual):

Initial Fixed Term (Years):

Total Loan Term (Years):

Adjustment Frequency (Years):

Periodic Cap (%):

Lifetime Cap (%):

Worst-Case Scenario Summary

Initial Monthly Payment:

Max Potential Monthly Payment:

Rate and Payment Breakdown

Initial Fixed Rate:

Maximum Lifetime Rate:

Total Interest Paid (Worst-Case):

Rate Adjustment Schedule

Period	Current Rate	New Payment	Remaining Balance	Remaining Term

Understanding ARM Calculations

This simulation calculates the payment changes assuming the interest rate increases by the full periodic cap at every adjustment opportunity until the lifetime cap is reached. This represents the worst-case scenario for payment affordability.

Payment Recalculation

At each adjustment point, a new EMI is calculated using the following formula, applied to the **remaining principal balance** and the **remaining term**:

New EMI = B [ i(1 + i)ⁿ / ( (1 + i)ⁿ - 1 ) ]

Where:
B = Remaining Principal Balance
i = New Monthly Rate (New Annual Rate / 1200)
n = Remaining Number of Payments

This process ensures the loan is fully amortized (paid off) by the end of the total loan term.