# The Floor Rate Matters

Many borrowers overlook the impact of having a minimum or floor interest rate on their adjustable rate mortgage. Some may wrongly think that because they have an adjustable rate loan their interest rate can go up and down without constraints.

The floor rate is the lowest interest rate that the mortgage can go to. If the loan is adjusting and the interest rate index plus the margin is less than the floor rate then the borrower will be charged the floor rate instead. In this example, we examine a mortgage where the floor (minimum) interest rate is equal to the starting interest rate on the loan. This has been a common situation for subprime mortgages. The interest rate is fixed for the first three years. Let's examine, a very unlikely scenario, the best case scenario where the index rate goes to zero in the 2nd month and stays at zero for the duration of the mortgage.

Use the adjustable rate mortgage calculator to explore how your interest rate, payment, and principal balance on your ARM can change.

If there was no floor rate, the borrower would have been charged the 4.5% margin beginning in the first adjustment period. However, since the floor rate is 7.5% even in best case scenario this borrower will be charged 7.5% throughout the life of the loan.
Best
MonthInterest
Rate
Index
Rate
Payment Interest Principal Balance
17.500%3.000%\$1,398\$1,250\$148\$199,852
27.500%0.000%\$1,398\$1,249\$149\$199,702
37.500%0.000%\$1,398\$1,248\$150\$199,552
47.500%0.000%\$1,398\$1,247\$151\$199,401
57.500%0.000%\$1,398\$1,246\$152\$199,249
67.500%0.000%\$1,398\$1,245\$153\$199,095
77.500%0.000%\$1,398\$1,244\$154\$198,941
87.500%0.000%\$1,398\$1,243\$155\$198,786
97.500%0.000%\$1,398\$1,242\$156\$198,630
107.500%0.000%\$1,398\$1,241\$157\$198,473
117.500%0.000%\$1,398\$1,240\$158\$198,315
127.500%0.000%\$1,398\$1,239\$159\$198,156
Year 1  \$16,781\$14,937\$1,844
137.500%0.000%\$1,398\$1,238\$160\$197,996
147.500%0.000%\$1,398\$1,237\$161\$197,835
157.500%0.000%\$1,398\$1,236\$162\$197,673
167.500%0.000%\$1,398\$1,235\$163\$197,510
177.500%0.000%\$1,398\$1,234\$164\$197,346
187.500%0.000%\$1,398\$1,233\$165\$197,181
197.500%0.000%\$1,398\$1,232\$166\$197,015
207.500%0.000%\$1,398\$1,231\$167\$196,848
217.500%0.000%\$1,398\$1,230\$168\$196,680
227.500%0.000%\$1,398\$1,229\$169\$196,511
237.500%0.000%\$1,398\$1,228\$170\$196,341
247.500%0.000%\$1,398\$1,227\$171\$196,170
Year 2  \$16,781\$14,794\$1,987
257.500%0.000%\$1,398\$1,226\$172\$195,997
267.500%0.000%\$1,398\$1,225\$173\$195,824
277.500%0.000%\$1,398\$1,224\$175\$195,649
287.500%0.000%\$1,398\$1,223\$176\$195,474
297.500%0.000%\$1,398\$1,222\$177\$195,297
307.500%0.000%\$1,398\$1,221\$178\$195,119
317.500%0.000%\$1,398\$1,219\$179\$194,940
327.500%0.000%\$1,398\$1,218\$180\$194,760
337.500%0.000%\$1,398\$1,217\$181\$194,579
347.500%0.000%\$1,398\$1,216\$182\$194,397
357.500%0.000%\$1,398\$1,215\$183\$194,213
367.500%0.000%\$1,398\$1,214\$185\$194,028
Year 3  \$16,781\$14,640\$2,141
377.500%0.000%\$1,398\$1,213\$186\$193,843
387.500%0.000%\$1,398\$1,212\$187\$193,656
397.500%0.000%\$1,398\$1,210\$188\$193,468
407.500%0.000%\$1,398\$1,209\$189\$193,278
417.500%0.000%\$1,398\$1,208\$190\$193,088
427.500%0.000%\$1,398\$1,207\$192\$192,896
437.500%0.000%\$1,398\$1,206\$193\$192,704
447.500%0.000%\$1,398\$1,204\$194\$192,510
457.500%0.000%\$1,398\$1,203\$195\$192,314
467.500%0.000%\$1,398\$1,202\$196\$192,118
477.500%0.000%\$1,398\$1,201\$198\$191,920
487.500%0.000%\$1,398\$1,200\$199\$191,721
Year 4  \$16,781\$14,474\$2,307
497.500%0.000%\$1,398\$1,198\$200\$191,521
507.500%0.000%\$1,398\$1,197\$201\$191,320
517.500%0.000%\$1,398\$1,196\$203\$191,117
527.500%0.000%\$1,398\$1,194\$204\$190,913
537.500%0.000%\$1,398\$1,193\$205\$190,708
547.500%0.000%\$1,398\$1,192\$207\$190,501
557.500%0.000%\$1,398\$1,191\$208\$190,293
567.500%0.000%\$1,398\$1,189\$209\$190,084
577.500%0.000%\$1,398\$1,188\$210\$189,874
587.500%0.000%\$1,398\$1,187\$212\$189,662
597.500%0.000%\$1,398\$1,185\$213\$189,449
607.500%0.000%\$1,398\$1,184\$214\$189,235
Year 5  \$16,781\$14,295\$2,486
617.500%0.000%\$1,398\$1,183\$216\$189,019
627.500%0.000%\$1,398\$1,181\$217\$188,802
637.500%0.000%\$1,398\$1,180\$218\$188,584
647.500%0.000%\$1,398\$1,179\$220\$188,364
657.500%0.000%\$1,398\$1,177\$221\$188,143
667.500%0.000%\$1,398\$1,176\$223\$187,920
677.500%0.000%\$1,398\$1,174\$224\$187,696
687.500%0.000%\$1,398\$1,173\$225\$187,471
697.500%0.000%\$1,398\$1,172\$227\$187,244
707.500%0.000%\$1,398\$1,170\$228\$187,016
717.500%0.000%\$1,398\$1,169\$230\$186,786
727.500%0.000%\$1,398\$1,167\$231\$186,555
Year 6  \$16,781\$14,102\$2,679
737.500%0.000%\$1,398\$1,166\$232\$186,323
747.500%0.000%\$1,398\$1,165\$234\$186,089
757.500%0.000%\$1,398\$1,163\$235\$185,854
767.500%0.000%\$1,398\$1,162\$237\$185,617
777.500%0.000%\$1,398\$1,160\$238\$185,378
787.500%0.000%\$1,398\$1,159\$240\$185,139
797.500%0.000%\$1,398\$1,157\$241\$184,897
807.500%0.000%\$1,398\$1,156\$243\$184,655
817.500%0.000%\$1,398\$1,154\$244\$184,410
827.500%0.000%\$1,398\$1,153\$246\$184,164
837.500%0.000%\$1,398\$1,151\$247\$183,917
847.500%0.000%\$1,398\$1,149\$249\$183,668
Year 7  \$16,781\$13,894\$2,887
857.500%0.000%\$1,398\$1,148\$250\$183,418
867.500%0.000%\$1,398\$1,146\$252\$183,165
877.500%0.000%\$1,398\$1,145\$254\$182,912
887.500%0.000%\$1,398\$1,143\$255\$182,657
897.500%0.000%\$1,398\$1,142\$257\$182,400
907.500%0.000%\$1,398\$1,140\$258\$182,141
917.500%0.000%\$1,398\$1,138\$260\$181,881
927.500%0.000%\$1,398\$1,137\$262\$181,620
937.500%0.000%\$1,398\$1,135\$263\$181,356
947.500%0.000%\$1,398\$1,133\$265\$181,091
957.500%0.000%\$1,398\$1,132\$267\$180,825
967.500%0.000%\$1,398\$1,130\$268\$180,556
Year 8  \$16,781\$13,670\$3,112
977.500%0.000%\$1,398\$1,128\$270\$180,286
987.500%0.000%\$1,398\$1,127\$272\$180,015
997.500%0.000%\$1,398\$1,125\$273\$179,741
1007.500%0.000%\$1,398\$1,123\$275\$179,466
1017.500%0.000%\$1,398\$1,122\$277\$179,190
1027.500%0.000%\$1,398\$1,120\$278\$178,911
1037.500%0.000%\$1,398\$1,118\$280\$178,631
1047.500%0.000%\$1,398\$1,116\$282\$178,349
1057.500%0.000%\$1,398\$1,115\$284\$178,065
1067.500%0.000%\$1,398\$1,113\$286\$177,780
1077.500%0.000%\$1,398\$1,111\$287\$177,492
1087.500%0.000%\$1,398\$1,109\$289\$177,203
Year 9  \$16,781\$13,428\$3,353
1097.500%0.000%\$1,398\$1,108\$291\$176,912
1107.500%0.000%\$1,398\$1,106\$293\$176,620
1117.500%0.000%\$1,398\$1,104\$295\$176,325
1127.500%0.000%\$1,398\$1,102\$296\$176,029
1137.500%0.000%\$1,398\$1,100\$298\$175,730
1147.500%0.000%\$1,398\$1,098\$300\$175,430
1157.500%0.000%\$1,398\$1,096\$302\$175,128
1167.500%0.000%\$1,398\$1,095\$304\$174,824
1177.500%0.000%\$1,398\$1,093\$306\$174,519
1187.500%0.000%\$1,398\$1,091\$308\$174,211
1197.500%0.000%\$1,398\$1,089\$310\$173,901
1207.500%0.000%\$1,398\$1,087\$312\$173,590
Year 10  \$16,781\$13,168\$3,613
1217.500%0.000%\$1,398\$1,085\$313\$173,276
1227.500%0.000%\$1,398\$1,083\$315\$172,961
1237.500%0.000%\$1,398\$1,081\$317\$172,643
1247.500%0.000%\$1,398\$1,079\$319\$172,324
1257.500%0.000%\$1,398\$1,077\$321\$172,003
1267.500%0.000%\$1,398\$1,075\$323\$171,679
1277.500%0.000%\$1,398\$1,073\$325\$171,354
1287.500%0.000%\$1,398\$1,071\$327\$171,026
1297.500%0.000%\$1,398\$1,069\$330\$170,697
1307.500%0.000%\$1,398\$1,067\$332\$170,365
1317.500%0.000%\$1,398\$1,065\$334\$170,032
1327.500%0.000%\$1,398\$1,063\$336\$169,696
Year 11  \$16,781\$12,887\$3,894
1337.500%0.000%\$1,398\$1,061\$338\$169,358
1347.500%0.000%\$1,398\$1,058\$340\$169,018
1357.500%0.000%\$1,398\$1,056\$342\$168,676
1367.500%0.000%\$1,398\$1,054\$344\$168,332
1377.500%0.000%\$1,398\$1,052\$346\$167,985
1387.500%0.000%\$1,398\$1,050\$349\$167,637
1397.500%0.000%\$1,398\$1,048\$351\$167,286
1407.500%0.000%\$1,398\$1,046\$353\$166,933
1417.500%0.000%\$1,398\$1,043\$355\$166,578
1427.500%0.000%\$1,398\$1,041\$357\$166,221
1437.500%0.000%\$1,398\$1,039\$360\$165,861
1447.500%0.000%\$1,398\$1,037\$362\$165,500
Year 12  \$16,781\$12,585\$4,196
1457.500%0.000%\$1,398\$1,034\$364\$165,136
1467.500%0.000%\$1,398\$1,032\$366\$164,769
1477.500%0.000%\$1,398\$1,030\$369\$164,401
1487.500%0.000%\$1,398\$1,028\$371\$164,030
1497.500%0.000%\$1,398\$1,025\$373\$163,656
1507.500%0.000%\$1,398\$1,023\$376\$163,281
1517.500%0.000%\$1,398\$1,021\$378\$162,903
1527.500%0.000%\$1,398\$1,018\$380\$162,523
1537.500%0.000%\$1,398\$1,016\$383\$162,140
1547.500%0.000%\$1,398\$1,013\$385\$161,755
1557.500%0.000%\$1,398\$1,011\$387\$161,367
1567.500%0.000%\$1,398\$1,009\$390\$160,978
Year 13  \$16,781\$12,259\$4,522
1577.500%0.000%\$1,398\$1,006\$392\$160,585
1587.500%0.000%\$1,398\$1,004\$395\$160,190
1597.500%0.000%\$1,398\$1,001\$397\$159,793
1607.500%0.000%\$1,398\$999\$400\$159,394
1617.500%0.000%\$1,398\$996\$402\$158,991
1627.500%0.000%\$1,398\$994\$405\$158,587
1637.500%0.000%\$1,398\$991\$407\$158,179
1647.500%0.000%\$1,398\$989\$410\$157,769
1657.500%0.000%\$1,398\$986\$412\$157,357
1667.500%0.000%\$1,398\$983\$415\$156,942
1677.500%0.000%\$1,398\$981\$418\$156,525
1687.500%0.000%\$1,398\$978\$420\$156,104
Year 14  \$16,781\$11,908\$4,873
1697.500%0.000%\$1,398\$976\$423\$155,682
1707.500%0.000%\$1,398\$973\$425\$155,256
1717.500%0.000%\$1,398\$970\$428\$154,828
1727.500%0.000%\$1,398\$968\$431\$154,397
1737.500%0.000%\$1,398\$965\$433\$153,964
1747.500%0.000%\$1,398\$962\$436\$153,528
1757.500%0.000%\$1,398\$960\$439\$153,089
1767.500%0.000%\$1,398\$957\$442\$152,647
1777.500%0.000%\$1,398\$954\$444\$152,203
1787.500%0.000%\$1,398\$951\$447\$151,756
1797.500%0.000%\$1,398\$948\$450\$151,306
1807.500%0.000%\$1,398\$946\$453\$150,853
Year 15  \$16,781\$11,530\$5,251
1817.500%0.000%\$1,398\$943\$456\$150,397
1827.500%0.000%\$1,398\$940\$458\$149,939
1837.500%0.000%\$1,398\$937\$461\$149,478
1847.500%0.000%\$1,398\$934\$464\$149,014
1857.500%0.000%\$1,398\$931\$467\$148,546
1867.500%0.000%\$1,398\$928\$470\$148,076
1877.500%0.000%\$1,398\$925\$473\$147,603
1887.500%0.000%\$1,398\$923\$476\$147,128
1897.500%0.000%\$1,398\$920\$479\$146,649
1907.500%0.000%\$1,398\$917\$482\$146,167
1917.500%0.000%\$1,398\$914\$485\$145,682
1927.500%0.000%\$1,398\$911\$488\$145,194
Year 16  \$16,781\$11,122\$5,659
1937.500%0.000%\$1,398\$907\$491\$144,703
1947.500%0.000%\$1,398\$904\$494\$144,209
1957.500%0.000%\$1,398\$901\$497\$143,712
1967.500%0.000%\$1,398\$898\$500\$143,212
1977.500%0.000%\$1,398\$895\$503\$142,708
1987.500%0.000%\$1,398\$892\$507\$142,202
1997.500%0.000%\$1,398\$889\$510\$141,692
2007.500%0.000%\$1,398\$886\$513\$141,179
2017.500%0.000%\$1,398\$882\$516\$140,663
2027.500%0.000%\$1,398\$879\$519\$140,144
2037.500%0.000%\$1,398\$876\$523\$139,621
2047.500%0.000%\$1,398\$873\$526\$139,096
Year 17  \$16,781\$10,683\$6,098
2057.500%0.000%\$1,398\$869\$529\$138,566
2067.500%0.000%\$1,398\$866\$532\$138,034
2077.500%0.000%\$1,398\$863\$536\$137,498
2087.500%0.000%\$1,398\$859\$539\$136,959
2097.500%0.000%\$1,398\$856\$542\$136,417
2107.500%0.000%\$1,398\$853\$546\$135,871
2117.500%0.000%\$1,398\$849\$549\$135,322
2127.500%0.000%\$1,398\$846\$553\$134,769
2137.500%0.000%\$1,398\$842\$556\$134,213
2147.500%0.000%\$1,398\$839\$560\$133,653
2157.500%0.000%\$1,398\$835\$563\$133,090
2167.500%0.000%\$1,398\$832\$567\$132,524
Year 18  \$16,781\$10,209\$6,572
2177.500%0.000%\$1,398\$828\$570\$131,954
2187.500%0.000%\$1,398\$825\$574\$131,380
2197.500%0.000%\$1,398\$821\$577\$130,803
2207.500%0.000%\$1,398\$818\$581\$130,222
2217.500%0.000%\$1,398\$814\$585\$129,637
2227.500%0.000%\$1,398\$810\$588\$129,049
2237.500%0.000%\$1,398\$807\$592\$128,457
2247.500%0.000%\$1,398\$803\$596\$127,861
2257.500%0.000%\$1,398\$799\$599\$127,262
2267.500%0.000%\$1,398\$795\$603\$126,659
2277.500%0.000%\$1,398\$792\$607\$126,052
2287.500%0.000%\$1,398\$788\$611\$125,442
Year 19  \$16,781\$9,699\$7,082
2297.500%0.000%\$1,398\$784\$614\$124,827
2307.500%0.000%\$1,398\$780\$618\$124,209
2317.500%0.000%\$1,398\$776\$622\$123,587
2327.500%0.000%\$1,398\$772\$626\$122,961
2337.500%0.000%\$1,398\$769\$630\$122,331
2347.500%0.000%\$1,398\$765\$634\$121,697
2357.500%0.000%\$1,398\$761\$638\$121,059
2367.500%0.000%\$1,398\$757\$642\$120,417
2377.500%0.000%\$1,398\$753\$646\$119,772
2387.500%0.000%\$1,398\$749\$650\$119,122
2397.500%0.000%\$1,398\$745\$654\$118,468
2407.500%0.000%\$1,398\$740\$658\$117,810
Year 20  \$16,781\$9,149\$7,632
2417.500%0.000%\$1,398\$736\$662\$117,148
2427.500%0.000%\$1,398\$732\$666\$116,481
2437.500%0.000%\$1,398\$728\$670\$115,811
2447.500%0.000%\$1,398\$724\$675\$115,136
2457.500%0.000%\$1,398\$720\$679\$114,458
2467.500%0.000%\$1,398\$715\$683\$113,775
2477.500%0.000%\$1,398\$711\$687\$113,087
2487.500%0.000%\$1,398\$707\$692\$112,396
2497.500%0.000%\$1,398\$702\$696\$111,700
2507.500%0.000%\$1,398\$698\$700\$110,999
2517.500%0.000%\$1,398\$694\$705\$110,295
2527.500%0.000%\$1,398\$689\$709\$109,586
Year 21  \$16,781\$8,557\$8,224
2537.500%0.000%\$1,398\$685\$714\$108,872
2547.500%0.000%\$1,398\$680\$718\$108,154
2557.500%0.000%\$1,398\$676\$722\$107,432
2567.500%0.000%\$1,398\$671\$727\$106,705
2577.500%0.000%\$1,398\$667\$732\$105,973
2587.500%0.000%\$1,398\$662\$736\$105,237
2597.500%0.000%\$1,398\$658\$741\$104,496
2607.500%0.000%\$1,398\$653\$745\$103,751
2617.500%0.000%\$1,398\$648\$750\$103,001
2627.500%0.000%\$1,398\$644\$755\$102,246
2637.500%0.000%\$1,398\$639\$759\$101,487
2647.500%0.000%\$1,398\$634\$764\$100,723
Year 22  \$16,781\$7,918\$8,863
2657.500%0.000%\$1,398\$630\$769\$99,954
2667.500%0.000%\$1,398\$625\$774\$99,180
2677.500%0.000%\$1,398\$620\$779\$98,402
2687.500%0.000%\$1,398\$615\$783\$97,618
2697.500%0.000%\$1,398\$610\$788\$96,830
2707.500%0.000%\$1,398\$605\$793\$96,037
2717.500%0.000%\$1,398\$600\$798\$95,238
2727.500%0.000%\$1,398\$595\$803\$94,435
2737.500%0.000%\$1,398\$590\$808\$93,627
2747.500%0.000%\$1,398\$585\$813\$92,814
2757.500%0.000%\$1,398\$580\$818\$91,995
2767.500%0.000%\$1,398\$575\$823\$91,172
Year 23  \$16,781\$7,230\$9,551
2777.500%0.000%\$1,398\$570\$829\$90,343
2787.500%0.000%\$1,398\$565\$834\$89,510
2797.500%0.000%\$1,398\$559\$839\$88,671
2807.500%0.000%\$1,398\$554\$844\$87,826
2817.500%0.000%\$1,398\$549\$850\$86,977
2827.500%0.000%\$1,398\$544\$855\$86,122
2837.500%0.000%\$1,398\$538\$860\$85,262
2847.500%0.000%\$1,398\$533\$866\$84,396
2857.500%0.000%\$1,398\$527\$871\$83,525
2867.500%0.000%\$1,398\$522\$876\$82,649
2877.500%0.000%\$1,398\$517\$882\$81,767
2887.500%0.000%\$1,398\$511\$887\$80,880
Year 24  \$16,781\$6,489\$10,292
2897.500%0.000%\$1,398\$506\$893\$79,987
2907.500%0.000%\$1,398\$500\$899\$79,088
2917.500%0.000%\$1,398\$494\$904\$78,184
2927.500%0.000%\$1,398\$489\$910\$77,274
2937.500%0.000%\$1,398\$483\$915\$76,359
2947.500%0.000%\$1,398\$477\$921\$75,438
2957.500%0.000%\$1,398\$471\$927\$74,511
2967.500%0.000%\$1,398\$466\$933\$73,578
2977.500%0.000%\$1,398\$460\$939\$72,639
2987.500%0.000%\$1,398\$454\$944\$71,695
2997.500%0.000%\$1,398\$448\$950\$70,745
3007.500%0.000%\$1,398\$442\$956\$69,788
Year 25  \$16,781\$5,690\$11,091
3017.500%0.000%\$1,398\$436\$962\$68,826
3027.500%0.000%\$1,398\$430\$968\$67,858
3037.500%0.000%\$1,398\$424\$974\$66,883
3047.500%0.000%\$1,398\$418\$980\$65,903
3057.500%0.000%\$1,398\$412\$987\$64,917
3067.500%0.000%\$1,398\$406\$993\$63,924
3077.500%0.000%\$1,398\$400\$999\$62,925
3087.500%0.000%\$1,398\$393\$1,005\$61,920
3097.500%0.000%\$1,398\$387\$1,011\$60,908
3107.500%0.000%\$1,398\$381\$1,018\$59,891
3117.500%0.000%\$1,398\$374\$1,024\$58,866
3127.500%0.000%\$1,398\$368\$1,031\$57,836
Year 26  \$16,781\$4,829\$11,952
3137.500%0.000%\$1,398\$361\$1,037\$56,799
3147.500%0.000%\$1,398\$355\$1,043\$55,756
3157.500%0.000%\$1,398\$348\$1,050\$54,706
3167.500%0.000%\$1,398\$342\$1,057\$53,649
3177.500%0.000%\$1,398\$335\$1,063\$52,586
3187.500%0.000%\$1,398\$329\$1,070\$51,516
3197.500%0.000%\$1,398\$322\$1,076\$50,440
3207.500%0.000%\$1,398\$315\$1,083\$49,357
3217.500%0.000%\$1,398\$308\$1,090\$48,267
3227.500%0.000%\$1,398\$302\$1,097\$47,170
3237.500%0.000%\$1,398\$295\$1,104\$46,066
3247.500%0.000%\$1,398\$288\$1,111\$44,956
Year 27  \$16,781\$3,901\$12,880
3257.500%0.000%\$1,398\$281\$1,117\$43,838
3267.500%0.000%\$1,398\$274\$1,124\$42,714
3277.500%0.000%\$1,398\$267\$1,131\$41,582
3287.500%0.000%\$1,398\$260\$1,139\$40,444
3297.500%0.000%\$1,398\$253\$1,146\$39,298
3307.500%0.000%\$1,398\$246\$1,153\$38,145
3317.500%0.000%\$1,398\$238\$1,160\$36,985
3327.500%0.000%\$1,398\$231\$1,167\$35,818
3337.500%0.000%\$1,398\$224\$1,175\$34,643
3347.500%0.000%\$1,398\$217\$1,182\$33,462
3357.500%0.000%\$1,398\$209\$1,189\$32,272
3367.500%0.000%\$1,398\$202\$1,197\$31,076
Year 28  \$16,781\$2,901\$13,880
3377.500%0.000%\$1,398\$194\$1,204\$29,871
3387.500%0.000%\$1,398\$187\$1,212\$28,660
3397.500%0.000%\$1,398\$179\$1,219\$27,440
3407.500%0.000%\$1,398\$172\$1,227\$26,213
3417.500%0.000%\$1,398\$164\$1,235\$24,979
3427.500%0.000%\$1,398\$156\$1,242\$23,736
3437.500%0.000%\$1,398\$148\$1,250\$22,486
3447.500%0.000%\$1,398\$141\$1,258\$21,228
3457.500%0.000%\$1,398\$133\$1,266\$19,963
3467.500%0.000%\$1,398\$125\$1,274\$18,689
3477.500%0.000%\$1,398\$117\$1,282\$17,407
3487.500%0.000%\$1,398\$109\$1,290\$16,118
Year 29  \$16,781\$1,823\$14,958
3497.500%0.000%\$1,398\$101\$1,298\$14,820
3507.500%0.000%\$1,398\$93\$1,306\$13,514
3517.500%0.000%\$1,398\$84\$1,314\$12,200
3527.500%0.000%\$1,398\$76\$1,322\$10,878
3537.500%0.000%\$1,398\$68\$1,330\$9,548
3547.500%0.000%\$1,398\$60\$1,339\$8,209
3557.500%0.000%\$1,398\$51\$1,347\$6,862
3567.500%0.000%\$1,398\$43\$1,356\$5,506
3577.500%0.000%\$1,398\$34\$1,364\$4,142
3587.500%0.000%\$1,398\$26\$1,373\$2,770
3597.500%0.000%\$1,398\$17\$1,381\$1,389
3607.500%0.000%\$1,397\$9\$1,389\$0
Year 30  \$16,780\$662\$16,118
Grand
Total
\$503,434 \$303,434 \$200,000

## Mortgage Calculator - Help

Amortization Schedule
The amortization schedule show you how monthly principal and interest payment and principal balances change over the life of your loan.
Floor Rate
Floor rate is the minimum interest rate for an adjustable rate mortgage (ARM).
Index Rate
Rate Adjustment on ARMs are based on the index rate, the margin, the adjustment schedule, interest rate caps, and floor rate specified in your loan documents. Index rates change over time. They should be published and widely available. Common indexes used for setting mortgage rates have include the Prime Rate, Libor (London Interbank Offer Rate) and U.S. Treasury Rates.
Interest
The portion of your mortgage payment that is due to the interest rate being applied to the principal balance. The Total Interest for a mortgage is the sum of all interest paid over the life of a loan.
The interest rate changes on an adjustable rate mortage (ARM) during adjustment periods specified in your loan documents. Your interest rate may have a fixed period where it does not change followed by adjustements on a regularly scheduled basis. For example, the interest rate on a mortgage could be fixed for 2 years followed by adjustments every 6 months.
Interest Rate Caps
Limits how much your interest rate can be increased during each adjustment period for an ARM. The cap for the first adjustment period may be different than the cap on subsequent adjustments. There also may be a maximim overall cap on interest rate increases during the life of your loan.
Interest Rate Scenarios
To decide if an adjustable rate mortgage is right for you, you should how changes in interest rates will effect the mortgage. The adjustable rate mortgage calculator shows you how your payment changes in the best case where rates are set at the minimum for your mortgage, the worst case where rates are set at the maximum for your mortgage, and the stable case where rates remain constant for your mortgage.
Loan Amount
The initial principal balance or your mortgage at closing.
Margin
When an ARM adjusts the margin is added to the index rate to help determine your interest rate. Interest rate caps and the floor rate for your mortgage may limit how much your actual interest rate changes. The margin typically is fixed for the life of the loan. It should be clearly specified in your loan documents.
Payment Shock
Occurs when the required minimum payment for a mortgage increases significantly. This can occur on adjustable rate mortgage when interest rates rise sharply, on interest-only mortgages when the interest-only period ends, and on balloon mortgages when the balloon payment is due.
Principal
The portion of your mortgage payment that is used to pay down the current balance of your mortgage. The principal balance represents how much you owe on the mortgage.
Start Rate
The initial interest rate on an Adjustable Rate Mortgage.
Term
The amortization term is one of the key factors that determine your required mortgage payment. Your required mortgage payment for fully amortizing mortgages is the amount that would result in the mortgage being closest to being paid off by the end of the amortization term. Longer amortization terms result in lower required mortgage payments for fully amortizating mortgages, all other things being equal.