A 10/1 Adjustable-Rate Mortgage (ARM) has a fixed interest rate for the first 10 years, after which the rate adjusts annually based on the index plus the lender's margin.

How do extra payments affect my ARM?

Making extra principal payments during the initial fixed period reduces your balance faster, lowering total interest paid and potentially decreasing future monthly payments after adjustments.

What is an interest-only option on a 10/1 ARM?

An interest-only option allows you to pay only the interest portion of your mortgage during the initial fixed period. Principal remains unchanged, which lowers monthly payments temporarily but may increase total interest over the life of the loan.

Where can I find the current Fannie Mae ARM index rate?

You can find the current index rate used by Fannie Mae on the Federal Reserve Bank of New York website (SOFR) or the Federal Reserve Bank of St. Louis (1-Year Treasury Constant Maturity Rate).

What is a margin in an ARM?

The margin is a fixed percentage added to the index rate by the lender to determine your fully adjusted interest rate. It stays the same for the life of the loan.

How does the lifetime cap work on a 10/1 ARM?

The lifetime cap limits how much your interest rate can increase over the life of the loan. For example, a 5% lifetime cap ensures your rate cannot rise more than 5% above your initial fixed rate.

What is an annual rate cap?

An annual rate cap restricts how much your interest rate can increase each year after the fixed period. This protects you from large sudden jumps in monthly payments.

How do I calculate my first adjustment payment?

The first adjustment payment is calculated using your remaining balance after the fixed period, the new interest rate (index + margin), and the remaining loan term. The calculator automatically updates this when you enter your numbers.

What happens if the index rate increases sharply?

Rate caps protect you from sharp increases. With a 10/1 ARM, your interest rate cannot rise more than the annual cap each year and cannot exceed the lifetime cap, limiting worst-case payment scenarios.

How does the amortization schedule work for my ARM?

The amortization schedule shows how your payments are applied to principal and interest each year. It accounts for rate adjustments, extra payments, and interest-only periods, providing a worst-case scenario for planning.

Can I adjust the calculator for my specific loan terms?

Yes, the calculator lets you enter your loan amount, interest rate, loan term, adjustment frequency, margin, index, and extra payments. Totals and amortization schedules update automatically based on your inputs.

Why should I use this 10/1 ARM calculator?

This calculator helps you understand how a 10/1 ARM works, visualize payment changes after the fixed period, see the impact of extra payments or interest-only terms, and plan for worst-case scenarios.

10/1 ARM Calculator with Extra Payments & Interest-Only Options

Calculate your adjustable-rate mortgage payments with precision

Our 10/1 ARM calculator provides a clear view of payments after ten years of fixed interest. You can simulate extra principal payments or interest-only periods to understand potential changes to your balance and interest costs. Update the fields to match your loan, and the totals will adjust automatically.

Basic Loan Information

Loan Amount ($)

Initial Interest Rate (%)

Loan Term (Years)

ARM Adjustment Details

Note: The boxes below are for illustration purposes. You may adjust the values to match your specific loan terms.

Adjustment Frequency after initial fixed period

Note: The calculation boxes below are for illustration purposes. You can edit any field to explore different scenarios, and the totals will automatically update.

Margin + Index = Interest Rate

Margin (%)

Index (%)

Interest Rate (%)

Current Interest Rate + Annual Cap = Interest Rate

Current Interest Rate (%)

Annual Cap (%)

Interest Rate (%)

Lifetime Interest Rate Cap (%)

Annual Rate Cap (%)

Optional Settings

Interest-only payments during initial fixed period

Extra Principal Payment ($/month)

Payment Summary

Initial Monthly Payment

Your fixed payment for the first 10 years

First Adjustment Payment

Year 11 payment (rate + 1%)

Maximum Payment

At lifetime cap (initial rate + 5%)

Total Interest (Worst-Case)

Based on +1% annual increases to cap

Amortization Schedule (Worst-Case Scenario)

Shows rates increasing by 1% annually after year 10, up to the lifetime cap

Year	Rate	Monthly Payment	Principal	Interest	Balance

How to Find the Current Index Rate

I understand that calculating the adjustment rate can be confusing, but it doesn't have to be. Much of that confusion comes from the index rate. The boxes above provide a clear visual of how your new interest rate is determined.

Here is the the best source for the index used by Fannie Mae:

1. Federal Reserve Bank of New York (Official Source)
> The Secured Overnight Financing Rate (SOFR) https://www.newyorkfed.org/markets/reference-rates/sofr-averages-and-index
The index rate can be found under the 30-DAY AVERAGE (%). Look for the date on the left. This is the index rate that Fannie Mae uses. As of this writing, the index rate was 4.20185 .

2. Federal Reserve Bank of St. Louis (FRED)
> 1-Year Treasury Constant Maturity Rate: https://fred.stlouisfed.org/series/DGS1
In the top-left corner, under "Observations," you'll see the current index rate.

As of this writing, the index rate was 3.59%. Enter 3.59 in the index box above. Your lender will provide the margin, which is the additional percentage they charge. This margin remains fixed for the life of the loan. Add the index rate and margin together to find your current interest rate.

Understanding the Fannie Mae ARM Index Rate

But what happens if the index rate spikes? That's where rate caps protect you. For this ARM, the interest rate can increase by no more than 2% per year (every 12 months) until it reaches the lifetime cap of 5%. After entering your numbers, review the worst-case amortization schedule to see how payments could adjust over time.

Ask the lender when the new interest rate is calculated. For example: The lender calculates the new rate at the end of the initial term (e.g., after 10 years for a 10/1 ARM), and the new rate will apply for the next adjustment period.

This calculator is designed to help you clearly understand how a adjustable-rate mortgage works - and to give you the confidence to manage it wisely.