These tables are for borrowers considering whether or not to take an adjustable-rate mortgage (ARM) rather than a fixed-rate mortgage (FRM); and if so, which of the many available ARMs to take. The tables only cover no-negative amortization ARMs. There will be another set of tables for negative amortization ARMs.

The price of $2 covers two sets of tables. One set shows 5 loans for each of 5 scenarios, the other shows 5 scenarios for each of 5 loans. To see a sample page, click here.

ARMs have the advantage of carrying a lower interest rate, and lower monthly payment, in the early years. But because the ARM rate is adjustable, it may rise in later years, and the payment will rise with it.

Intelligent decisions about ARMs, therefore, require that account be taken of what might happen to the rate and mortgage payment when the initial rate period ends. This depends, in part, on what happens to interest rates in the future.

We define "what might happen" in terms of interest rate scenarios: a set of assumptions about how the interest rate index used by the ARM will change in the future. We use 5 scenarios: No Change: the index stays where it is now. Small rate increase: after 2 years, the index increases by .5 % /year for 3 years. Moderate rate increase: after 1 year, the rate index increases by .75%/year for 4 years. Larger rate increase: starting immediately, the index increases by 1%/year for 5 years. Worst case: the index immediately increases so sharply that the ARM rate goes to the maximum allowed by the note.

What happens to the interest rate and payment on an ARM also depends on a number of features of the ARM that mortgage shoppers often don't know about. Worse, ARM shoppers are often unaware of what they don't know that they need to know, and therefore don't pursue it. Loan officers rarely get into these details unless they are pressed for it. Even when shoppers have the information, furthermore, pulling it together in coherent form is a challenge.

To deal with this problem we developed a special worksheet of ARM features along with instructions on how to fill it out. To see the worksheet, click here.

IMPORTANT: If this is your first pass through the program, print out the Worksheet and the Instructions for using it before you do anything else. Then fill out the Worksheet for the ARMs you are considering, or have a loan officer do it for you. You want the information on the Worksheet before paying your $3 for the tables.