|
|
 |
- Fixed Rate Mortgage
- A fixed rate mortgage has the same interest rate and monthly payment throughout the term of the mortgage. The payment is calculated to payoff the mortgage balance at the end of the term. The most common terms are 15 year and 30 years.
- LIBOR ARM
- This is an adjustable rate mortgage (ARM) that uses London Interbank Offered Rate (LIBOR) as its base index.. The term is typically 30 years. After any fixed interest rate period has passed, the interest rate and payment adjusts annually based on the LIBOR rate.
| Common Adjustable Rate Mortgages |
|---|
| ARM Type | Months Fixed |
|---|
| 10/1 ARM | Fixed for 120 months, adjusts annually for the remaining term of the loan. |
| 7/1 ARM | Fixed for 84 months, adjusts annually for the remaining term of the loan. |
| 5/1 ARM | Fixed for 60 months, adjusts annually for the remaining term of the loan. |
| 3/1 ARM | Fixed for 36 months, adjusts annually for the remaining term of the loan. |
| 1 year ARM | Fixed for 12 months, adjusts annually for the remaining term of the loan. |
- Mortgage amount
- Expected balance for your mortgage.
- Term in years
- The number of years over which you will repay this mortgage. The most common mortgage terms are 15 years and 30 years.
- Expected rate change
- The annual adjustment you expect in your LIBOR ARM. The range for this calculator is minus 3% to plus 3%. Use a negative value if you believe interest rates will decrease, a positive value if you believe they will increase.
- Interest rate
- Annual interest rate for each mortgage type. Typically an LIBOR ARM will have a lower interest rate than a fixed rate mortgage.
- Months rate fixed
- This is the number of months the rate is fixed for an LIBOR ARM. During this period the interest rate and the monthly payment will remain fixed. The rate will then adjust annually by the expected rate change.
- Interest rate cap
- This is the maximum interest rate for this mortgage. The mortgage's interest rate will never exceed the interest rate cap.
- Prepayment
- A monthly prepayment of principal you would like to apply to your LIBOR ARM balance.
- Monthly payment
- Monthly principal and interest payment (PI) for the Fixed Rate Mortgage and the LIBOR ARM. This includes any prepayments of principal
|
|
|
|
|
|
|
|
|
|