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 | ▲ | |||||
|---|---|---|---|---|---|---|
| Month | Interest Rate |
Index Rate |
Payment | Interest | Principal | Balance |
| 1 | 7.500% | 3.000% | $1,398 | $1,250 | $148 | $199,852 |
| 2 | 7.500% | 0.000% | $1,398 | $1,249 | $149 | $199,702 |
| 3 | 7.500% | 0.000% | $1,398 | $1,248 | $150 | $199,552 |
| 4 | 7.500% | 0.000% | $1,398 | $1,247 | $151 | $199,401 |
| 5 | 7.500% | 0.000% | $1,398 | $1,246 | $152 | $199,249 |
| 6 | 7.500% | 0.000% | $1,398 | $1,245 | $153 | $199,095 |
| 7 | 7.500% | 0.000% | $1,398 | $1,244 | $154 | $198,941 |
| 8 | 7.500% | 0.000% | $1,398 | $1,243 | $155 | $198,786 |
| 9 | 7.500% | 0.000% | $1,398 | $1,242 | $156 | $198,630 |
| 10 | 7.500% | 0.000% | $1,398 | $1,241 | $157 | $198,473 |
| 11 | 7.500% | 0.000% | $1,398 | $1,240 | $158 | $198,315 |
| 12 | 7.500% | 0.000% | $1,398 | $1,239 | $159 | $198,156 |
| Year 1 | $16,781 | $14,937 | $1,844 | |||
| 13 | 7.500% | 0.000% | $1,398 | $1,238 | $160 | $197,996 |
| 14 | 7.500% | 0.000% | $1,398 | $1,237 | $161 | $197,835 |
| 15 | 7.500% | 0.000% | $1,398 | $1,236 | $162 | $197,673 |
| 16 | 7.500% | 0.000% | $1,398 | $1,235 | $163 | $197,510 |
| 17 | 7.500% | 0.000% | $1,398 | $1,234 | $164 | $197,346 |
| 18 | 7.500% | 0.000% | $1,398 | $1,233 | $165 | $197,181 |
| 19 | 7.500% | 0.000% | $1,398 | $1,232 | $166 | $197,015 |
| 20 | 7.500% | 0.000% | $1,398 | $1,231 | $167 | $196,848 |
| 21 | 7.500% | 0.000% | $1,398 | $1,230 | $168 | $196,680 |
| 22 | 7.500% | 0.000% | $1,398 | $1,229 | $169 | $196,511 |
| 23 | 7.500% | 0.000% | $1,398 | $1,228 | $170 | $196,341 |
| 24 | 7.500% | 0.000% | $1,398 | $1,227 | $171 | $196,170 |
| Year 2 | $16,781 | $14,794 | $1,987 | |||
| 25 | 7.500% | 0.000% | $1,398 | $1,226 | $172 | $195,997 |
| 26 | 7.500% | 0.000% | $1,398 | $1,225 | $173 | $195,824 |
| 27 | 7.500% | 0.000% | $1,398 | $1,224 | $175 | $195,649 |
| 28 | 7.500% | 0.000% | $1,398 | $1,223 | $176 | $195,474 |
| 29 | 7.500% | 0.000% | $1,398 | $1,222 | $177 | $195,297 |
| 30 | 7.500% | 0.000% | $1,398 | $1,221 | $178 | $195,119 |
| 31 | 7.500% | 0.000% | $1,398 | $1,219 | $179 | $194,940 |
| 32 | 7.500% | 0.000% | $1,398 | $1,218 | $180 | $194,760 |
| 33 | 7.500% | 0.000% | $1,398 | $1,217 | $181 | $194,579 |
| 34 | 7.500% | 0.000% | $1,398 | $1,216 | $182 | $194,397 |
| 35 | 7.500% | 0.000% | $1,398 | $1,215 | $183 | $194,213 |
| 36 | 7.500% | 0.000% | $1,398 | $1,214 | $185 | $194,028 |
| Year 3 | $16,781 | $14,640 | $2,141 | |||
| 37 | 7.500% | 0.000% | $1,398 | $1,213 | $186 | $193,843 |
| 38 | 7.500% | 0.000% | $1,398 | $1,212 | $187 | $193,656 |
| 39 | 7.500% | 0.000% | $1,398 | $1,210 | $188 | $193,468 |
| 40 | 7.500% | 0.000% | $1,398 | $1,209 | $189 | $193,278 |
| 41 | 7.500% | 0.000% | $1,398 | $1,208 | $190 | $193,088 |
| 42 | 7.500% | 0.000% | $1,398 | $1,207 | $192 | $192,896 |
| 43 | 7.500% | 0.000% | $1,398 | $1,206 | $193 | $192,704 |
| 44 | 7.500% | 0.000% | $1,398 | $1,204 | $194 | $192,510 |
| 45 | 7.500% | 0.000% | $1,398 | $1,203 | $195 | $192,314 |
| 46 | 7.500% | 0.000% | $1,398 | $1,202 | $196 | $192,118 |
| 47 | 7.500% | 0.000% | $1,398 | $1,201 | $198 | $191,920 |
| 48 | 7.500% | 0.000% | $1,398 | $1,200 | $199 | $191,721 |
| Year 4 | $16,781 | $14,474 | $2,307 | |||
| 49 | 7.500% | 0.000% | $1,398 | $1,198 | $200 | $191,521 |
| 50 | 7.500% | 0.000% | $1,398 | $1,197 | $201 | $191,320 |
| 51 | 7.500% | 0.000% | $1,398 | $1,196 | $203 | $191,117 |
| 52 | 7.500% | 0.000% | $1,398 | $1,194 | $204 | $190,913 |
| 53 | 7.500% | 0.000% | $1,398 | $1,193 | $205 | $190,708 |
| 54 | 7.500% | 0.000% | $1,398 | $1,192 | $207 | $190,501 |
| 55 | 7.500% | 0.000% | $1,398 | $1,191 | $208 | $190,293 |
| 56 | 7.500% | 0.000% | $1,398 | $1,189 | $209 | $190,084 |
| 57 | 7.500% | 0.000% | $1,398 | $1,188 | $210 | $189,874 |
| 58 | 7.500% | 0.000% | $1,398 | $1,187 | $212 | $189,662 |
| 59 | 7.500% | 0.000% | $1,398 | $1,185 | $213 | $189,449 |
| 60 | 7.500% | 0.000% | $1,398 | $1,184 | $214 | $189,235 |
| Year 5 | $16,781 | $14,295 | $2,486 | |||
| 61 | 7.500% | 0.000% | $1,398 | $1,183 | $216 | $189,019 |
| 62 | 7.500% | 0.000% | $1,398 | $1,181 | $217 | $188,802 |
| 63 | 7.500% | 0.000% | $1,398 | $1,180 | $218 | $188,584 |
| 64 | 7.500% | 0.000% | $1,398 | $1,179 | $220 | $188,364 |
| 65 | 7.500% | 0.000% | $1,398 | $1,177 | $221 | $188,143 |
| 66 | 7.500% | 0.000% | $1,398 | $1,176 | $223 | $187,920 |
| 67 | 7.500% | 0.000% | $1,398 | $1,174 | $224 | $187,696 |
| 68 | 7.500% | 0.000% | $1,398 | $1,173 | $225 | $187,471 |
| 69 | 7.500% | 0.000% | $1,398 | $1,172 | $227 | $187,244 |
| 70 | 7.500% | 0.000% | $1,398 | $1,170 | $228 | $187,016 |
| 71 | 7.500% | 0.000% | $1,398 | $1,169 | $230 | $186,786 |
| 72 | 7.500% | 0.000% | $1,398 | $1,167 | $231 | $186,555 |
| Year 6 | $16,781 | $14,102 | $2,679 | |||
| 73 | 7.500% | 0.000% | $1,398 | $1,166 | $232 | $186,323 |
| 74 | 7.500% | 0.000% | $1,398 | $1,165 | $234 | $186,089 |
| 75 | 7.500% | 0.000% | $1,398 | $1,163 | $235 | $185,854 |
| 76 | 7.500% | 0.000% | $1,398 | $1,162 | $237 | $185,617 |
| 77 | 7.500% | 0.000% | $1,398 | $1,160 | $238 | $185,378 |
| 78 | 7.500% | 0.000% | $1,398 | $1,159 | $240 | $185,139 |
| 79 | 7.500% | 0.000% | $1,398 | $1,157 | $241 | $184,897 |
| 80 | 7.500% | 0.000% | $1,398 | $1,156 | $243 | $184,655 |
| 81 | 7.500% | 0.000% | $1,398 | $1,154 | $244 | $184,410 |
| 82 | 7.500% | 0.000% | $1,398 | $1,153 | $246 | $184,164 |
| 83 | 7.500% | 0.000% | $1,398 | $1,151 | $247 | $183,917 |
| 84 | 7.500% | 0.000% | $1,398 | $1,149 | $249 | $183,668 |
| Year 7 | $16,781 | $13,894 | $2,887 | |||
| 85 | 7.500% | 0.000% | $1,398 | $1,148 | $250 | $183,418 |
| 86 | 7.500% | 0.000% | $1,398 | $1,146 | $252 | $183,165 |
| 87 | 7.500% | 0.000% | $1,398 | $1,145 | $254 | $182,912 |
| 88 | 7.500% | 0.000% | $1,398 | $1,143 | $255 | $182,657 |
| 89 | 7.500% | 0.000% | $1,398 | $1,142 | $257 | $182,400 |
| 90 | 7.500% | 0.000% | $1,398 | $1,140 | $258 | $182,141 |
| 91 | 7.500% | 0.000% | $1,398 | $1,138 | $260 | $181,881 |
| 92 | 7.500% | 0.000% | $1,398 | $1,137 | $262 | $181,620 |
| 93 | 7.500% | 0.000% | $1,398 | $1,135 | $263 | $181,356 |
| 94 | 7.500% | 0.000% | $1,398 | $1,133 | $265 | $181,091 |
| 95 | 7.500% | 0.000% | $1,398 | $1,132 | $267 | $180,825 |
| 96 | 7.500% | 0.000% | $1,398 | $1,130 | $268 | $180,556 |
| Year 8 | $16,781 | $13,670 | $3,112 | |||
| 97 | 7.500% | 0.000% | $1,398 | $1,128 | $270 | $180,286 |
| 98 | 7.500% | 0.000% | $1,398 | $1,127 | $272 | $180,015 |
| 99 | 7.500% | 0.000% | $1,398 | $1,125 | $273 | $179,741 |
| 100 | 7.500% | 0.000% | $1,398 | $1,123 | $275 | $179,466 |
| 101 | 7.500% | 0.000% | $1,398 | $1,122 | $277 | $179,190 |
| 102 | 7.500% | 0.000% | $1,398 | $1,120 | $278 | $178,911 |
| 103 | 7.500% | 0.000% | $1,398 | $1,118 | $280 | $178,631 |
| 104 | 7.500% | 0.000% | $1,398 | $1,116 | $282 | $178,349 |
| 105 | 7.500% | 0.000% | $1,398 | $1,115 | $284 | $178,065 |
| 106 | 7.500% | 0.000% | $1,398 | $1,113 | $286 | $177,780 |
| 107 | 7.500% | 0.000% | $1,398 | $1,111 | $287 | $177,492 |
| 108 | 7.500% | 0.000% | $1,398 | $1,109 | $289 | $177,203 |
| Year 9 | $16,781 | $13,428 | $3,353 | |||
| 109 | 7.500% | 0.000% | $1,398 | $1,108 | $291 | $176,912 |
| 110 | 7.500% | 0.000% | $1,398 | $1,106 | $293 | $176,620 |
| 111 | 7.500% | 0.000% | $1,398 | $1,104 | $295 | $176,325 |
| 112 | 7.500% | 0.000% | $1,398 | $1,102 | $296 | $176,029 |
| 113 | 7.500% | 0.000% | $1,398 | $1,100 | $298 | $175,730 |
| 114 | 7.500% | 0.000% | $1,398 | $1,098 | $300 | $175,430 |
| 115 | 7.500% | 0.000% | $1,398 | $1,096 | $302 | $175,128 |
| 116 | 7.500% | 0.000% | $1,398 | $1,095 | $304 | $174,824 |
| 117 | 7.500% | 0.000% | $1,398 | $1,093 | $306 | $174,519 |
| 118 | 7.500% | 0.000% | $1,398 | $1,091 | $308 | $174,211 |
| 119 | 7.500% | 0.000% | $1,398 | $1,089 | $310 | $173,901 |
| 120 | 7.500% | 0.000% | $1,398 | $1,087 | $312 | $173,590 |
| Year 10 | $16,781 | $13,168 | $3,613 | |||
| 121 | 7.500% | 0.000% | $1,398 | $1,085 | $313 | $173,276 |
| 122 | 7.500% | 0.000% | $1,398 | $1,083 | $315 | $172,961 |
| 123 | 7.500% | 0.000% | $1,398 | $1,081 | $317 | $172,643 |
| 124 | 7.500% | 0.000% | $1,398 | $1,079 | $319 | $172,324 |
| 125 | 7.500% | 0.000% | $1,398 | $1,077 | $321 | $172,003 |
| 126 | 7.500% | 0.000% | $1,398 | $1,075 | $323 | $171,679 |
| 127 | 7.500% | 0.000% | $1,398 | $1,073 | $325 | $171,354 |
| 128 | 7.500% | 0.000% | $1,398 | $1,071 | $327 | $171,026 |
| 129 | 7.500% | 0.000% | $1,398 | $1,069 | $330 | $170,697 |
| 130 | 7.500% | 0.000% | $1,398 | $1,067 | $332 | $170,365 |
| 131 | 7.500% | 0.000% | $1,398 | $1,065 | $334 | $170,032 |
| 132 | 7.500% | 0.000% | $1,398 | $1,063 | $336 | $169,696 |
| Year 11 | $16,781 | $12,887 | $3,894 | |||
| 133 | 7.500% | 0.000% | $1,398 | $1,061 | $338 | $169,358 |
| 134 | 7.500% | 0.000% | $1,398 | $1,058 | $340 | $169,018 |
| 135 | 7.500% | 0.000% | $1,398 | $1,056 | $342 | $168,676 |
| 136 | 7.500% | 0.000% | $1,398 | $1,054 | $344 | $168,332 |
| 137 | 7.500% | 0.000% | $1,398 | $1,052 | $346 | $167,985 |
| 138 | 7.500% | 0.000% | $1,398 | $1,050 | $349 | $167,637 |
| 139 | 7.500% | 0.000% | $1,398 | $1,048 | $351 | $167,286 |
| 140 | 7.500% | 0.000% | $1,398 | $1,046 | $353 | $166,933 |
| 141 | 7.500% | 0.000% | $1,398 | $1,043 | $355 | $166,578 |
| 142 | 7.500% | 0.000% | $1,398 | $1,041 | $357 | $166,221 |
| 143 | 7.500% | 0.000% | $1,398 | $1,039 | $360 | $165,861 |
| 144 | 7.500% | 0.000% | $1,398 | $1,037 | $362 | $165,500 |
| Year 12 | $16,781 | $12,585 | $4,196 | |||
| 145 | 7.500% | 0.000% | $1,398 | $1,034 | $364 | $165,136 |
| 146 | 7.500% | 0.000% | $1,398 | $1,032 | $366 | $164,769 |
| 147 | 7.500% | 0.000% | $1,398 | $1,030 | $369 | $164,401 |
| 148 | 7.500% | 0.000% | $1,398 | $1,028 | $371 | $164,030 |
| 149 | 7.500% | 0.000% | $1,398 | $1,025 | $373 | $163,656 |
| 150 | 7.500% | 0.000% | $1,398 | $1,023 | $376 | $163,281 |
| 151 | 7.500% | 0.000% | $1,398 | $1,021 | $378 | $162,903 |
| 152 | 7.500% | 0.000% | $1,398 | $1,018 | $380 | $162,523 |
| 153 | 7.500% | 0.000% | $1,398 | $1,016 | $383 | $162,140 |
| 154 | 7.500% | 0.000% | $1,398 | $1,013 | $385 | $161,755 |
| 155 | 7.500% | 0.000% | $1,398 | $1,011 | $387 | $161,367 |
| 156 | 7.500% | 0.000% | $1,398 | $1,009 | $390 | $160,978 |
| Year 13 | $16,781 | $12,259 | $4,522 | |||
| 157 | 7.500% | 0.000% | $1,398 | $1,006 | $392 | $160,585 |
| 158 | 7.500% | 0.000% | $1,398 | $1,004 | $395 | $160,190 |
| 159 | 7.500% | 0.000% | $1,398 | $1,001 | $397 | $159,793 |
| 160 | 7.500% | 0.000% | $1,398 | $999 | $400 | $159,394 |
| 161 | 7.500% | 0.000% | $1,398 | $996 | $402 | $158,991 |
| 162 | 7.500% | 0.000% | $1,398 | $994 | $405 | $158,587 |
| 163 | 7.500% | 0.000% | $1,398 | $991 | $407 | $158,179 |
| 164 | 7.500% | 0.000% | $1,398 | $989 | $410 | $157,769 |
| 165 | 7.500% | 0.000% | $1,398 | $986 | $412 | $157,357 |
| 166 | 7.500% | 0.000% | $1,398 | $983 | $415 | $156,942 |
| 167 | 7.500% | 0.000% | $1,398 | $981 | $418 | $156,525 |
| 168 | 7.500% | 0.000% | $1,398 | $978 | $420 | $156,104 |
| Year 14 | $16,781 | $11,908 | $4,873 | |||
| 169 | 7.500% | 0.000% | $1,398 | $976 | $423 | $155,682 |
| 170 | 7.500% | 0.000% | $1,398 | $973 | $425 | $155,256 |
| 171 | 7.500% | 0.000% | $1,398 | $970 | $428 | $154,828 |
| 172 | 7.500% | 0.000% | $1,398 | $968 | $431 | $154,397 |
| 173 | 7.500% | 0.000% | $1,398 | $965 | $433 | $153,964 |
| 174 | 7.500% | 0.000% | $1,398 | $962 | $436 | $153,528 |
| 175 | 7.500% | 0.000% | $1,398 | $960 | $439 | $153,089 |
| 176 | 7.500% | 0.000% | $1,398 | $957 | $442 | $152,647 |
| 177 | 7.500% | 0.000% | $1,398 | $954 | $444 | $152,203 |
| 178 | 7.500% | 0.000% | $1,398 | $951 | $447 | $151,756 |
| 179 | 7.500% | 0.000% | $1,398 | $948 | $450 | $151,306 |
| 180 | 7.500% | 0.000% | $1,398 | $946 | $453 | $150,853 |
| Year 15 | $16,781 | $11,530 | $5,251 | |||
| 181 | 7.500% | 0.000% | $1,398 | $943 | $456 | $150,397 |
| 182 | 7.500% | 0.000% | $1,398 | $940 | $458 | $149,939 |
| 183 | 7.500% | 0.000% | $1,398 | $937 | $461 | $149,478 |
| 184 | 7.500% | 0.000% | $1,398 | $934 | $464 | $149,014 |
| 185 | 7.500% | 0.000% | $1,398 | $931 | $467 | $148,546 |
| 186 | 7.500% | 0.000% | $1,398 | $928 | $470 | $148,076 |
| 187 | 7.500% | 0.000% | $1,398 | $925 | $473 | $147,603 |
| 188 | 7.500% | 0.000% | $1,398 | $923 | $476 | $147,128 |
| 189 | 7.500% | 0.000% | $1,398 | $920 | $479 | $146,649 |
| 190 | 7.500% | 0.000% | $1,398 | $917 | $482 | $146,167 |
| 191 | 7.500% | 0.000% | $1,398 | $914 | $485 | $145,682 |
| 192 | 7.500% | 0.000% | $1,398 | $911 | $488 | $145,194 |
| Year 16 | $16,781 | $11,122 | $5,659 | |||
| 193 | 7.500% | 0.000% | $1,398 | $907 | $491 | $144,703 |
| 194 | 7.500% | 0.000% | $1,398 | $904 | $494 | $144,209 |
| 195 | 7.500% | 0.000% | $1,398 | $901 | $497 | $143,712 |
| 196 | 7.500% | 0.000% | $1,398 | $898 | $500 | $143,212 |
| 197 | 7.500% | 0.000% | $1,398 | $895 | $503 | $142,708 |
| 198 | 7.500% | 0.000% | $1,398 | $892 | $507 | $142,202 |
| 199 | 7.500% | 0.000% | $1,398 | $889 | $510 | $141,692 |
| 200 | 7.500% | 0.000% | $1,398 | $886 | $513 | $141,179 |
| 201 | 7.500% | 0.000% | $1,398 | $882 | $516 | $140,663 |
| 202 | 7.500% | 0.000% | $1,398 | $879 | $519 | $140,144 |
| 203 | 7.500% | 0.000% | $1,398 | $876 | $523 | $139,621 |
| 204 | 7.500% | 0.000% | $1,398 | $873 | $526 | $139,096 |
| Year 17 | $16,781 | $10,683 | $6,098 | |||
| 205 | 7.500% | 0.000% | $1,398 | $869 | $529 | $138,566 |
| 206 | 7.500% | 0.000% | $1,398 | $866 | $532 | $138,034 |
| 207 | 7.500% | 0.000% | $1,398 | $863 | $536 | $137,498 |
| 208 | 7.500% | 0.000% | $1,398 | $859 | $539 | $136,959 |
| 209 | 7.500% | 0.000% | $1,398 | $856 | $542 | $136,417 |
| 210 | 7.500% | 0.000% | $1,398 | $853 | $546 | $135,871 |
| 211 | 7.500% | 0.000% | $1,398 | $849 | $549 | $135,322 |
| 212 | 7.500% | 0.000% | $1,398 | $846 | $553 | $134,769 |
| 213 | 7.500% | 0.000% | $1,398 | $842 | $556 | $134,213 |
| 214 | 7.500% | 0.000% | $1,398 | $839 | $560 | $133,653 |
| 215 | 7.500% | 0.000% | $1,398 | $835 | $563 | $133,090 |
| 216 | 7.500% | 0.000% | $1,398 | $832 | $567 | $132,524 |
| Year 18 | $16,781 | $10,209 | $6,572 | |||
| 217 | 7.500% | 0.000% | $1,398 | $828 | $570 | $131,954 |
| 218 | 7.500% | 0.000% | $1,398 | $825 | $574 | $131,380 |
| 219 | 7.500% | 0.000% | $1,398 | $821 | $577 | $130,803 |
| 220 | 7.500% | 0.000% | $1,398 | $818 | $581 | $130,222 |
| 221 | 7.500% | 0.000% | $1,398 | $814 | $585 | $129,637 |
| 222 | 7.500% | 0.000% | $1,398 | $810 | $588 | $129,049 |
| 223 | 7.500% | 0.000% | $1,398 | $807 | $592 | $128,457 |
| 224 | 7.500% | 0.000% | $1,398 | $803 | $596 | $127,861 |
| 225 | 7.500% | 0.000% | $1,398 | $799 | $599 | $127,262 |
| 226 | 7.500% | 0.000% | $1,398 | $795 | $603 | $126,659 |
| 227 | 7.500% | 0.000% | $1,398 | $792 | $607 | $126,052 |
| 228 | 7.500% | 0.000% | $1,398 | $788 | $611 | $125,442 |
| Year 19 | $16,781 | $9,699 | $7,082 | |||
| 229 | 7.500% | 0.000% | $1,398 | $784 | $614 | $124,827 |
| 230 | 7.500% | 0.000% | $1,398 | $780 | $618 | $124,209 |
| 231 | 7.500% | 0.000% | $1,398 | $776 | $622 | $123,587 |
| 232 | 7.500% | 0.000% | $1,398 | $772 | $626 | $122,961 |
| 233 | 7.500% | 0.000% | $1,398 | $769 | $630 | $122,331 |
| 234 | 7.500% | 0.000% | $1,398 | $765 | $634 | $121,697 |
| 235 | 7.500% | 0.000% | $1,398 | $761 | $638 | $121,059 |
| 236 | 7.500% | 0.000% | $1,398 | $757 | $642 | $120,417 |
| 237 | 7.500% | 0.000% | $1,398 | $753 | $646 | $119,772 |
| 238 | 7.500% | 0.000% | $1,398 | $749 | $650 | $119,122 |
| 239 | 7.500% | 0.000% | $1,398 | $745 | $654 | $118,468 |
| 240 | 7.500% | 0.000% | $1,398 | $740 | $658 | $117,810 |
| Year 20 | $16,781 | $9,149 | $7,632 | |||
| 241 | 7.500% | 0.000% | $1,398 | $736 | $662 | $117,148 |
| 242 | 7.500% | 0.000% | $1,398 | $732 | $666 | $116,481 |
| 243 | 7.500% | 0.000% | $1,398 | $728 | $670 | $115,811 |
| 244 | 7.500% | 0.000% | $1,398 | $724 | $675 | $115,136 |
| 245 | 7.500% | 0.000% | $1,398 | $720 | $679 | $114,458 |
| 246 | 7.500% | 0.000% | $1,398 | $715 | $683 | $113,775 |
| 247 | 7.500% | 0.000% | $1,398 | $711 | $687 | $113,087 |
| 248 | 7.500% | 0.000% | $1,398 | $707 | $692 | $112,396 |
| 249 | 7.500% | 0.000% | $1,398 | $702 | $696 | $111,700 |
| 250 | 7.500% | 0.000% | $1,398 | $698 | $700 | $110,999 |
| 251 | 7.500% | 0.000% | $1,398 | $694 | $705 | $110,295 |
| 252 | 7.500% | 0.000% | $1,398 | $689 | $709 | $109,586 |
| Year 21 | $16,781 | $8,557 | $8,224 | |||
| 253 | 7.500% | 0.000% | $1,398 | $685 | $714 | $108,872 |
| 254 | 7.500% | 0.000% | $1,398 | $680 | $718 | $108,154 |
| 255 | 7.500% | 0.000% | $1,398 | $676 | $722 | $107,432 |
| 256 | 7.500% | 0.000% | $1,398 | $671 | $727 | $106,705 |
| 257 | 7.500% | 0.000% | $1,398 | $667 | $732 | $105,973 |
| 258 | 7.500% | 0.000% | $1,398 | $662 | $736 | $105,237 |
| 259 | 7.500% | 0.000% | $1,398 | $658 | $741 | $104,496 |
| 260 | 7.500% | 0.000% | $1,398 | $653 | $745 | $103,751 |
| 261 | 7.500% | 0.000% | $1,398 | $648 | $750 | $103,001 |
| 262 | 7.500% | 0.000% | $1,398 | $644 | $755 | $102,246 |
| 263 | 7.500% | 0.000% | $1,398 | $639 | $759 | $101,487 |
| 264 | 7.500% | 0.000% | $1,398 | $634 | $764 | $100,723 |
| Year 22 | $16,781 | $7,918 | $8,863 | |||
| 265 | 7.500% | 0.000% | $1,398 | $630 | $769 | $99,954 |
| 266 | 7.500% | 0.000% | $1,398 | $625 | $774 | $99,180 |
| 267 | 7.500% | 0.000% | $1,398 | $620 | $779 | $98,402 |
| 268 | 7.500% | 0.000% | $1,398 | $615 | $783 | $97,618 |
| 269 | 7.500% | 0.000% | $1,398 | $610 | $788 | $96,830 |
| 270 | 7.500% | 0.000% | $1,398 | $605 | $793 | $96,037 |
| 271 | 7.500% | 0.000% | $1,398 | $600 | $798 | $95,238 |
| 272 | 7.500% | 0.000% | $1,398 | $595 | $803 | $94,435 |
| 273 | 7.500% | 0.000% | $1,398 | $590 | $808 | $93,627 |
| 274 | 7.500% | 0.000% | $1,398 | $585 | $813 | $92,814 |
| 275 | 7.500% | 0.000% | $1,398 | $580 | $818 | $91,995 |
| 276 | 7.500% | 0.000% | $1,398 | $575 | $823 | $91,172 |
| Year 23 | $16,781 | $7,230 | $9,551 | |||
| 277 | 7.500% | 0.000% | $1,398 | $570 | $829 | $90,343 |
| 278 | 7.500% | 0.000% | $1,398 | $565 | $834 | $89,510 |
| 279 | 7.500% | 0.000% | $1,398 | $559 | $839 | $88,671 |
| 280 | 7.500% | 0.000% | $1,398 | $554 | $844 | $87,826 |
| 281 | 7.500% | 0.000% | $1,398 | $549 | $850 | $86,977 |
| 282 | 7.500% | 0.000% | $1,398 | $544 | $855 | $86,122 |
| 283 | 7.500% | 0.000% | $1,398 | $538 | $860 | $85,262 |
| 284 | 7.500% | 0.000% | $1,398 | $533 | $866 | $84,396 |
| 285 | 7.500% | 0.000% | $1,398 | $527 | $871 | $83,525 |
| 286 | 7.500% | 0.000% | $1,398 | $522 | $876 | $82,649 |
| 287 | 7.500% | 0.000% | $1,398 | $517 | $882 | $81,767 |
| 288 | 7.500% | 0.000% | $1,398 | $511 | $887 | $80,880 |
| Year 24 | $16,781 | $6,489 | $10,292 | |||
| 289 | 7.500% | 0.000% | $1,398 | $506 | $893 | $79,987 |
| 290 | 7.500% | 0.000% | $1,398 | $500 | $899 | $79,088 |
| 291 | 7.500% | 0.000% | $1,398 | $494 | $904 | $78,184 |
| 292 | 7.500% | 0.000% | $1,398 | $489 | $910 | $77,274 |
| 293 | 7.500% | 0.000% | $1,398 | $483 | $915 | $76,359 |
| 294 | 7.500% | 0.000% | $1,398 | $477 | $921 | $75,438 |
| 295 | 7.500% | 0.000% | $1,398 | $471 | $927 | $74,511 |
| 296 | 7.500% | 0.000% | $1,398 | $466 | $933 | $73,578 |
| 297 | 7.500% | 0.000% | $1,398 | $460 | $939 | $72,639 |
| 298 | 7.500% | 0.000% | $1,398 | $454 | $944 | $71,695 |
| 299 | 7.500% | 0.000% | $1,398 | $448 | $950 | $70,745 |
| 300 | 7.500% | 0.000% | $1,398 | $442 | $956 | $69,788 |
| Year 25 | $16,781 | $5,690 | $11,091 | |||
| 301 | 7.500% | 0.000% | $1,398 | $436 | $962 | $68,826 |
| 302 | 7.500% | 0.000% | $1,398 | $430 | $968 | $67,858 |
| 303 | 7.500% | 0.000% | $1,398 | $424 | $974 | $66,883 |
| 304 | 7.500% | 0.000% | $1,398 | $418 | $980 | $65,903 |
| 305 | 7.500% | 0.000% | $1,398 | $412 | $987 | $64,917 |
| 306 | 7.500% | 0.000% | $1,398 | $406 | $993 | $63,924 |
| 307 | 7.500% | 0.000% | $1,398 | $400 | $999 | $62,925 |
| 308 | 7.500% | 0.000% | $1,398 | $393 | $1,005 | $61,920 |
| 309 | 7.500% | 0.000% | $1,398 | $387 | $1,011 | $60,908 |
| 310 | 7.500% | 0.000% | $1,398 | $381 | $1,018 | $59,891 |
| 311 | 7.500% | 0.000% | $1,398 | $374 | $1,024 | $58,866 |
| 312 | 7.500% | 0.000% | $1,398 | $368 | $1,031 | $57,836 |
| Year 26 | $16,781 | $4,829 | $11,952 | |||
| 313 | 7.500% | 0.000% | $1,398 | $361 | $1,037 | $56,799 |
| 314 | 7.500% | 0.000% | $1,398 | $355 | $1,043 | $55,756 |
| 315 | 7.500% | 0.000% | $1,398 | $348 | $1,050 | $54,706 |
| 316 | 7.500% | 0.000% | $1,398 | $342 | $1,057 | $53,649 |
| 317 | 7.500% | 0.000% | $1,398 | $335 | $1,063 | $52,586 |
| 318 | 7.500% | 0.000% | $1,398 | $329 | $1,070 | $51,516 |
| 319 | 7.500% | 0.000% | $1,398 | $322 | $1,076 | $50,440 |
| 320 | 7.500% | 0.000% | $1,398 | $315 | $1,083 | $49,357 |
| 321 | 7.500% | 0.000% | $1,398 | $308 | $1,090 | $48,267 |
| 322 | 7.500% | 0.000% | $1,398 | $302 | $1,097 | $47,170 |
| 323 | 7.500% | 0.000% | $1,398 | $295 | $1,104 | $46,066 |
| 324 | 7.500% | 0.000% | $1,398 | $288 | $1,111 | $44,956 |
| Year 27 | $16,781 | $3,901 | $12,880 | |||
| 325 | 7.500% | 0.000% | $1,398 | $281 | $1,117 | $43,838 |
| 326 | 7.500% | 0.000% | $1,398 | $274 | $1,124 | $42,714 |
| 327 | 7.500% | 0.000% | $1,398 | $267 | $1,131 | $41,582 |
| 328 | 7.500% | 0.000% | $1,398 | $260 | $1,139 | $40,444 |
| 329 | 7.500% | 0.000% | $1,398 | $253 | $1,146 | $39,298 |
| 330 | 7.500% | 0.000% | $1,398 | $246 | $1,153 | $38,145 |
| 331 | 7.500% | 0.000% | $1,398 | $238 | $1,160 | $36,985 |
| 332 | 7.500% | 0.000% | $1,398 | $231 | $1,167 | $35,818 |
| 333 | 7.500% | 0.000% | $1,398 | $224 | $1,175 | $34,643 |
| 334 | 7.500% | 0.000% | $1,398 | $217 | $1,182 | $33,462 |
| 335 | 7.500% | 0.000% | $1,398 | $209 | $1,189 | $32,272 |
| 336 | 7.500% | 0.000% | $1,398 | $202 | $1,197 | $31,076 |
| Year 28 | $16,781 | $2,901 | $13,880 | |||
| 337 | 7.500% | 0.000% | $1,398 | $194 | $1,204 | $29,871 |
| 338 | 7.500% | 0.000% | $1,398 | $187 | $1,212 | $28,660 |
| 339 | 7.500% | 0.000% | $1,398 | $179 | $1,219 | $27,440 |
| 340 | 7.500% | 0.000% | $1,398 | $172 | $1,227 | $26,213 |
| 341 | 7.500% | 0.000% | $1,398 | $164 | $1,235 | $24,979 |
| 342 | 7.500% | 0.000% | $1,398 | $156 | $1,242 | $23,736 |
| 343 | 7.500% | 0.000% | $1,398 | $148 | $1,250 | $22,486 |
| 344 | 7.500% | 0.000% | $1,398 | $141 | $1,258 | $21,228 |
| 345 | 7.500% | 0.000% | $1,398 | $133 | $1,266 | $19,963 |
| 346 | 7.500% | 0.000% | $1,398 | $125 | $1,274 | $18,689 |
| 347 | 7.500% | 0.000% | $1,398 | $117 | $1,282 | $17,407 |
| 348 | 7.500% | 0.000% | $1,398 | $109 | $1,290 | $16,118 |
| Year 29 | $16,781 | $1,823 | $14,958 | |||
| 349 | 7.500% | 0.000% | $1,398 | $101 | $1,298 | $14,820 |
| 350 | 7.500% | 0.000% | $1,398 | $93 | $1,306 | $13,514 |
| 351 | 7.500% | 0.000% | $1,398 | $84 | $1,314 | $12,200 |
| 352 | 7.500% | 0.000% | $1,398 | $76 | $1,322 | $10,878 |
| 353 | 7.500% | 0.000% | $1,398 | $68 | $1,330 | $9,548 |
| 354 | 7.500% | 0.000% | $1,398 | $60 | $1,339 | $8,209 |
| 355 | 7.500% | 0.000% | $1,398 | $51 | $1,347 | $6,862 |
| 356 | 7.500% | 0.000% | $1,398 | $43 | $1,356 | $5,506 |
| 357 | 7.500% | 0.000% | $1,398 | $34 | $1,364 | $4,142 |
| 358 | 7.500% | 0.000% | $1,398 | $26 | $1,373 | $2,770 |
| 359 | 7.500% | 0.000% | $1,398 | $17 | $1,381 | $1,389 |
| 360 | 7.500% | 0.000% | $1,397 | $9 | $1,389 | $0 |
| Year 30 | $16,780 | $662 | $16,118 | |||
| Grand Total | $503,434 | $303,434 | $200,000 |
The Basics
- The Floor Rate Matters
- Margin Makes a Difference
- Payment Shock
- Interest Rate Caps are Important
- Compare Future Interest Rate Scenarios
Common Loan Types
Other Examples
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.
- Interest Rate Adjustments
- 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.