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Mortgage Calculator
This
is an example of how your mortgage statement
would be calculated
each month.
Initially (for the first 12 months), the minimum payment is calculated using the start rate, the amount barrowed and the loan term. The minimum payment is recalculated every 12 months.
Example:
Loan Amount: $400,000.00
Initial Rate: 1.25%
Index: 3.888 (MTA as of April 2006)
Margin: 2.875%
Payment Cap: 7.5%
Fully Indexed Rate: 6.638% ( =index + margin)
| Minimum Payment Changes: |
| Year 1 |
$1333.01 |
= Base of Minimum Payment |
| Year 2 |
$1432.99 |
= $1333.01 + 7.50% |
| Year 3 |
$1540.46 |
= $716.49 + 7.50% |
| Year 4 |
$827.99 |
= $770.22 + 7.50% |
| Year 5 |
$1655.99 |
= $827.99 + 7.50% |
- Minimum Payment: $1,333.01 ( Deferred Interest: $921.33 )
- Interest Only Payment: $2,254.33
- Fully Amortizing 30-Year Payment: $2,597.85
- Fully Amortizing 15-Year Payment: $3,542.52
- Fully Amortizing 40-Year Payment: $2,417.17
Margin
The number of percentage points (for example, 2.875) the lender adds to the index rate to calculate the ARM interest rate at each adjustment. The margin is set in the mortgage documents and, remains fixed for the term of the loan and remains constant regardless of any changes in the interest rate or trends in the financial market place.
Loan Term
Option ARM loans are available for 30, 15 and, 40 years. Also known as the life of the loan.
Interest-Only Payment
Using the interest-only payment option, you will avoid deferred interest, when the minimum payment is not enough to pay the interest due for that month. This interest-only payment option, is obviously not used if the interest-only payment would be less than the minimum monthly payment. An interest-only payment option does not reduce in your principal.
The interest-only payment may change every month based on changes in the Arm Index used to determine your fully indexed rate.
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