ARM Reset Projector
An adjustable-rate mortgage does not reset to whatever the index says — it resets to whatever the index says after three separate caps have been applied, in order. This tool takes the terms off your own note and statement (balance, rate, margin, index, initial cap, periodic cap, lifetime cap, reset frequency) and shows the rate and the payment at every reset, which cap bound each one and by how much, and the worst case: the payment if the rate climbs to the lifetime cap as fast as the caps allow, and how many resets that takes. Nothing about the market is assumed and no index value is built in — the numbers on this page are an invented example, and every one of them should be replaced with yours. This projects the terms you enter; it does not predict where rates will go and it is not financial advice.
Try it now
Worked example
Learn the method
Inputs
- Current balance $
243817.62 - Current rate % (from your note)
5.375 - Months left on the loan
324 - Months until the first reset
9 - Index value % (from your statement)
4.25 - Margin % (from your note)
2.75 - Initial cap — first reset, ± %
2 - Periodic cap — later resets, ± %
1 - Lifetime cap is written as
Points above the start rate / A maximum rate % - Lifetime cap value %
5 - Months between resets after the first
12
Frequently asked
Where do I get the index and margin?
From your note and your most recent statement or change notice. The margin is fixed for the life of the loan and is written on the note; the index moves and is quoted on the statement. This tool deliberately has no index value built in — index rates change constantly, so a stored number would be confidently wrong.
In what order are the caps applied?
At every reset the per-reset cap is applied first — the initial cap at the first reset, the periodic cap at each later one — and then the lifetime cap is applied to the result as an absolute ceiling. Doing it the other way round can produce a rate above the lifetime cap, which is the most common way these projections go wrong.
What is the 'worst case' figure?
The payment if the index runs ahead of every cap, so the rate rises by the full cap at each reset until it reaches the lifetime ceiling. It is the highest payment your note allows. It is rarely presented up front, and it is the number worth knowing before you sign.
Is the lifetime cap a maximum rate or points above the start?
Both are written in the wild, so the tool asks rather than assuming. Pick whichever wording matches your note; the projection uses the resulting ceiling either way.
Are the starting numbers on this page typical?
No. They are an invented example chosen so the page shows a working calculation. They are not typical, benchmark or recommended terms, and this tool makes no claim about what caps or margins are normal.
Does it model a rate floor?
Only a floor of 0%. Many notes also carry a floor equal to the margin. If yours does, the projected downward moves may be deeper than your note allows; upward moves and the worst case are unaffected.
How far ahead does it project?
480 months (40 years) at most. If your loan runs longer than that the totals stop at the bound and the output says so.