Arm Mortgage Calculator Principal Loan Amount: Interest rate: Amortization Period (in years): Term (in months): Monthly Payment: function calculateMortgage() { // Get values from HTML form var loanAmount = document.getElementById("loanAmount").value; var interestRate = document.getElementById("interestRate").value; var amortizationPeriod = document.getElementById("amortizationPeriod").value; var term = document.getElementById("term").value; // Calculate the monthly payments for the arm mortgage loan var monthlyPayment = loanAmount * (interestRate / 12) * (Math.pow(1 + (interestRate / 12), term) / (Math.pow(1 + (interestRate / 12), term)-1)); // Set the result of monthly payment in html page document.getElementById("monthlyPayment").value = round(monthlyPayment,2); } // Round a number n to x decimal places function round(n, x) { var a = Math.pow(10, x); return Math.round(n * a) / a; } Arm Mortgage Calculators: What You Should Know An adjustable-rate mortgage calculator, or ARM calculator, is a great tool for anybody considering an ARM loan to purchase a house. While they have their advantages and disadvantages, adjustable rate mortgages are becoming increasingly popular and may be the best option for you depending on your current financial situation. Before making the decision to take out an ARM loan, you should familiarize yourself with the ARM calculator and understand how it works. What is an Adjustable-Rate Mortgage? An adjustable-rate mortgage, or ARM loan, is a type of mortgage loan with an interest rate that can change during the life of the loan. The interest rate for an ARM loan is usually based on a specific index, such as the Treasury bill or a Prime Rate index, plus a fixed rate, called a margin, that is set by the lender. This index plus the margin equals the loan’s interest rate. So, if the index goes up, the interest rate on the loan will go up. This is why ARM loans are often referred to as variable rate mortgages. When Is an ARM Loan a Good Choice? An ARM loan may be a good choice for somebody who wants to take advantage of a lower starting interest rate that comes with an ARM. This may allow the borrower to make smaller payments during the start of the loan. Over time, the payments will increase as the interest rate goes up. However, if the borrower is someone who expects to be in a higher paying job that would allow them to pay off their loan more quickly, or when they sell the house, an ARM loan may be a good option. How an ARM Mortgage Calculator Works An ARM mortgage calculator is a tool designed to help you predict how much you'll pay on your adjustable-rate mortgage. The calculator uses the index you select, as well as the margin set by the lender, to calculate the current interest rate of your ARM loan. The calculator will also let you estimate what your payments will be when the interest rate adjusts and how much you'll pay over the entire term of the loan. How to Use an ARM Mortgage Calculator Using an ARM mortgage calculator is straightforward and can provide you with valuable information about your mortgage loan. All you need to do is enter some simple information about the loan, including the current interest rate, the margin set by the lender, and the index used to calculate the ARM rate. Once this information is entered, the calculator will estimate the future adjustments of your mortgage, based on the index. You can also enter your loan amount, loan term, and desired monthly payment amount, and the calculator will calculate an estimated interest rate for you. What Is the Difference Between a Fixed-Rate and an Adjustable-Rate Mortgage? When it comes to choosing a mortgage, you have two main options: a fixed-rate mortgage (FRM) or an adjustable rate mortgage (ARM). An FRM is a mortgage with a fixed interest rate that stays the same throughout the entire life of the loan. With an ARM loan, the interest rate may increase or decrease depending on the current market conditions. The ARM interest rate is usually based on an index such as the Treasury bill or a Prime Rate index plus a margin set by the lender. How Can ARM Mortgage Calculators Help Me Decide Between an ARM Loan or FRM? With an ARM calculator, you can compare different types of loans and determine which one is most suitable for your needs. By using the calculator, you'll quickly be able to compare the different types of mortgages and will be able to make an informed decision. Using an ARM calculator to compare different mortgages will help you see what you will pay over the life of the loan and make it easier to decide which loan is right for you. What Else Should I Consider Before Choosing an ARM Loan? Before taking out an ARM loan, make sure you understand all the terms and conditions associated with the loan. It’s important to be aware of all the fees and charges associated with the loan and make sure you understand the potential future interest rate changes. You'll also need to consider how long you plan to stay in the home, as well as your ability to make larger payments if interest rates rise. Finally, make sure you read any documentation the lender provides carefully and make sure you fully understand all the details. Conclusion An ARM mortgage calculator can be an invaluable tool for anyone considering an adjustable-rate mortgage loan. By understanding the index and margin used to calculate the interest rate, and using an ARM calculator, you can easily compare different mortgages and determine which loan is best for you. However, before taking out an ARM loan, make sure you fully understand all the terms and conditions associated with the loan and read all the documentation provided carefully.