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Monthly Payment Calculator (7c)

Adjustable Rate Mortgages With Negative Amortization

Who This Calculator is For: Borrowers who want to know how the interest rate
and monthly payments may change on an adjustable rate mortgage
that permits negative amortization.

What This Calculator Does: This calculator displays amortization schedules
on an adjustable rate mortgage that permits negative amortization


Enter the Following Information
Basic Loan Information
  New Loan Amount or Existing Loan Balance (e.g. 100000)
  Initial Interest Rate on New Loan or Current Rate on Existing Loan  (e.g. 7.50)
  New Loan Term or Remaining Term on Existing Loan, in Months  (e.g. 360)
Payment Information
  Initial Monthly Payment of Principal and Interest  (e.g., 753.45)
  Payment Adjustment Period, in Months  (e.g., 12)
  Payment Adjustment Cap, in Percent  (e.g., 7.5 - if no cap, leave blank)
  Payment Recast Period, in Years  (e.g., 5 - if no recast period, leave blank)
  Negative Amortization Cap, in Percent  (e.g., 110 - if no cap, leave blank)
Interest Rate Information
  Current Value of ARM Interest Rate Index  ( e.g. 1.54 )
  Margin That is Added to Interest Rate Index  (e.g. 2.75)
   Number of Months to First Rate Adjustment  (e.g. 36)
  Duration, in Months, Between Subsequent Rate Adjustments  (e.g. 12)
  Maximum Interest Rate Over Life of Mortgage  (e.g. 12.5)
     Minimum Interest Rate Over Life of Mortgage  (e.g. 4.5)
    Assumptions About Future Interest Rates
 Stable Index:— Interest Rate Index Stays Unchanged for Life of Mortgage
 Worst Case:— Interest Rate Rises to the Maximum Allowable Rate in the Second Month
   Annual Change
to Begin in Year
x Years
Per Year
 Upward Movement:—Index Rises:
 Downward Movement:—Index Declines:
  Years Between
Direction Changes
Per Year
Volatile: — Interest Rate Index Rises, Then Declines:
 Volatile: — Interest Rate Index Declines, Then Rises:


Select the specific index used by your ARM from the ARM disclosure form. To find its current value, see the sources in Adjustable Rate Mortgage Indexes. Slide mouse over yellow box at beginning of line to close pop-up. The amount that is added to the index value on a rate adjustment date. It is shown in the ARM disclosure form. On a new loan, begin with the month in which the first payment is due. On an existing loan, begin with the month when the next payment is due. On a new loan, this is the initial rate period. On an existing loan, it is the number of months until the next rate adjustment date. This is the maximum amount that the interest rate can change on the first rate adjustment. ARMs that have initial rate periods of 5 years or longer often have larger adjustment caps on the first rate adjustment than on subsequent adjustments. After the initial rate period, the rate on most ARMs changes every year, every 6 months, or every month. Select any number of interest rate scenarios. The fewer you select, the more detail is provided about each scenario. If no maximum or minimum rates are specified in your loan document, please leave these items blank. Be sure you do not include taxes, hazard insurance, or mortgage insurance. This is the number of months the payment remains the same This is the largest percent increase or decrease in the monthly payment. It may be overridden at the end of a payment recast period, or in the event that the negative amortization cap is breached. At the end of each recast period, the payment of principal and interest will be recalculated to be fully-amortizing over the remaining term. The balance can never exceed this percent of the original loan balance. When it reaches that level, the payment is increased to the amount that will fully amortize the loan over the remaining term. Enter 1 if you want the rate increase to begin immediately, 2 if you want it to begin at the start of year 2, and so on.