Interest-Only 5/1 ARM
Let's explore a 5/1 ARM with a 5 year interest only period.
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Assuming that the index rate does not change over the life of the loan, when you press the Calculate button you'll see that after 5 years that the principal balance remains at the original loan amount while $12,375 per year has been paid in interest. At the beginning of year 6 the loan is fully amortized and the minimum monthly payment increases by 22% to $1,258. Click on the Calculate button in the form below to generate the results or enter your own information.
Fixed-Rate Interest-Only Mortgages:
30 Year Fixed Interest-Only Mortgage 20 Year Fixed Interest-Only Mortgage
Interest-Only ARMs With Interest-Only Periods Matching Fixed-Rate Period:
Interest-Only 3/1 ARM Interest-Only 5/1 ARM Interest Only 7/1 ARM
Interest-Only 10/1 ARM
Interest-Only ARMs With Interest Only Periods Longer Than Fixed-Rate Period:
3/1 ARM (10 Year Interest-Only Period) 5/1 ARM (10 Year Interest-Only Period)
7/1 ARM (10 Year Interest-Only Period)
