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10/1 ARM Calculator

Created by Tibor Pál, PhD candidate
Reviewed by Arturo Barrantes and Steven Wooding
Last updated: Jan 18, 2024

With this 10/1 ARM calculator (or 10-1 ARM mortgage calculator), you can quickly estimate the interest and monthly payment of a 10/1 ARM loan. You can easily analyze different scenarios by adjusting the interest rate according to your expectation.

You can also use the tool as a 10-1 ARM vs. 30-year fixed calculator by simply setting the interest rate adjustment to zero and seeing how your payment changes. Moreover, you can follow your balances in a dynamic chart or check the 10/1 ARM amortization schedule.

Read further and get familiar with the following points:

  • What is a 10-1 ARM?
  • How does a 10-1 ARM work?
  • What are the 10/1 ARM pros and cons?
  • What is the difference between 10-1 arm vs. 30-year fixed?

What is a 10-1 ARM?

A 10-1 ARM is a mortgage loan construction where the bank guarantees a fixed interest rate for the first 10 years of the loan. Afterward, the rate becomes variable and adjusts every year for the remaining life of the term.

What are the 10/1 ARM pros and cons?

We summarized the main 10/1 ARM pros and cons in the following points.

Pros of 10/1 ARM:

  • Lower interest rates than their fixed-rate counterparts in the first ten years;
  • Easier to qualify for a larger loan due to the lower starting payments; and
  • Flexible constructions: best for people who are only planning to hold them for the initial term.

Cons of 10/1 ARM:

  • Uncertain interest cost after ten years;
  • Complex and usually larger payments over time; and
  • Prepayment penalty.

How should I use the 10/1 ARM calculator?

You need to set the below parameters to apply the 10-1 ARM mortgage calculator.

  • Mortgage balance – Original loan amount of your mortgage;

  • Term – Remaining or original mortgage term;

  • Interest rate at the beginning of term – Set the introductory annual interest rate here, which is applied at the beginning of the mortgage term;

  • Compounding frequency (advanced mode) – How the lender computes interest on the principal;

  • Mortgage points (advanced mode) – An upfront fee as a percentage of the new balance;

  • Up-front fee (advanced mode) – Upfront fee paid on the mortgage;

  • Annual fee (advanced mode) – Yearly mortgage cost, which is paid monthly (spread over the year);

  • Adjustments by:

    • Manual setup – You need to set the expected interest rate adjustment that occurs in the given adjustment frequency and the interest cap/floor (set to zero if you want to see the estimates for a fixed mortgage); and
    • Trend – In this option, you only need to set the expected interest rate at the last period so the interest rates will be computed accordingly in each period;
  • First adjustment after (customized) – Set the term while the initial interest rate remains fixed; and

  • Periods between adjustments – Set the frequency for possible interest rate adjustments.

After setting all relevant parameters, you can immediately see the summary of your adjustable-rate mortgage with the following information:

  • Monthly payment;
  • APR (Annual Percentage Rate) - learn more about it at our APR calculator;
  • Term;
  • Paid interest; and
  • Total payments.

What's more, you can follow the progression of balance in a chart and check the 10/1 ARM amortization schedule where you can see the applied interest rate (monthly schedule).


How does a 10-1 ARM work?

If you take a 10/1 ARM, meaning an adjustable-rate mortgage, you can rely on a fixed rate for the first 10 years of the repayment term. After the first ten years, the interest rate becomes variable, and the bank can adjust it according to the prevailing market forces.

What is the difference between 10-1 arm vs. 30 year fixed?

While the interest rate is locked for the whole loan term at 30 years fixed, in the case of 10/1 ARM, the lender fixes the interest rate for the first ten years and then adjusts it annually based on the given economic environment.

What is the maximum monthly payment for a 30 years 10/1 ARM?

If the starting interest rate is 4.7% for a $200,000 10/1 ARM with a 30 year loan term and you expect that the interest rate will follow an upward trend reaching 10%, the estimated highest payment is expected to be $1.153.

Can the bank lower the monthly payment of an 10/1 ARM?

Yes. The monthly payment of a 10/1 ARM may decrease if interest rates become lower compared to the initial fixed rates during the first ten years.

How to compute the monthly payment of an 10/1 ARM loan?

Follow the below steps to compute the monthly payment of a 10/1 ARM.

  1. Compute the periodic equivalent rate (i) by dividing the annual rate by 12.

  2. Determine the number of periods (months, t) by multiplying 12 with the number of years.

  3. Use the below formula to compute the monthly payment fixed for the first ten years:

    Payment = (Loan amount × i × (1 + i)t) / ((1 + i)t - 1)

10/1 arm calculator disclaimer

You should consider the 10/1 ARM calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.

Tibor Pál, PhD candidate
Mortgage balance
Interest rate at the beginning of term
Adjustments by...
manual setup
Expected adjustment
Interest rate cap
chart of balances
Schedule from...
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Monthly payment$1,610.46 - $1,996.28
Term30 years
Paid interest$361,138.07
Total payments$661,138.07