# 10/1 ARM Calculator

URL: https://speedycalculator.com/calculators/finance/10-1-arm/
Last updated: 2026-10-25

> The 10/1 ARM calculator works out the payment on a 10/1 adjustable-rate mortgage – fixed for 10 years, then adjusting every year – the payment after the first reset, the worst case under the caps, and how it compares with a 30-year fixed loan.

## Inputs

- Loan amount
- Initial rate (years 1–10) (%)
- Expected index at the reset (e.g. SOFR) (%)
- Margin (%)
- First adjustment cap (%)
- Lifetime cap (above the initial rate) (%)
- 30-year fixed rate for comparison (%)

## Results

- Monthly payment, years 1–10
- Balance after 10 years
- Rate after the first adjustment
- Payment after the first adjustment
- Worst-case payment (lifetime cap)
- 30-year fixed payment
- Savings in the first 10 years vs fixed

## Formula

```
Payment during years 1–10 = pmt(start rate ÷ 12, 360, loan)
Balance after 10 years = bal(loan, i, 360, 120)
Payment after reset = pmt(new rate ÷ 12, 240, balance)
New rate = index + margin, limited by the caps (commonly 5/1/5 or 2/2/5)
```

## Explanation

A 10/1 ARM gives a long fixed period, so the rate is usually only a little below a 30-year fixed rate. It suits borrowers who expect to sell or refinance within 10 years.

### How to use the 10/1 ARM Calculator

- **Loan amount**
- **Initial rate (years 1–10)**
- **Expected index at the reset (e.g. SOFR)**
- **Margin**
- **First adjustment cap**
- **Lifetime cap (above the initial rate)**
- **30-year fixed rate for comparison**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the loan amount, the initial rate, the expected index and margin after year 10, the first-adjustment and lifetime caps, and a 30-year fixed rate for comparison.

### Tips

- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.

### Common mistakes to avoid

- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.

### Inputs explained

FieldWhat to enterLoan amountAmount in your currencyInitial rate (years 1–10)In %Expected index at the reset (e.g. SOFR)In %MarginIn %First adjustment capIn %Lifetime cap (above the initial rate)In %30-year fixed rate for comparisonIn %

### What each result means

- **Monthly payment, years 1–10** = pmt([Initial rate (years 1–10)]÷1200, 360, [Loan amount])
- **Balance after 10 years** = bal([Loan amount], [Initial rate (years 1–10)]÷1200, 360, 120)
- **Rate after the first adjustment** = min([Expected index at the reset (e.g. SOFR)] + [Margin], [Initial rate (years 1–10)] + [First adjustment cap], [Initial rate (years 1–10)] + [Lifetime cap (above the initial rate)])
- **Payment after the first adjustment** = pmt([Rate after the first adjustment]÷1200, 240, [Balance after 10 years])
- **Worst-case payment (lifetime cap)** = pmt(([Initial rate (years 1–10)] + [Lifetime cap (above the initial rate)])÷1200, 240, [Balance after 10 years])
- **30-year fixed payment** = pmt([30-year fixed rate for comparison]÷1200, 360, [Loan amount])
- **Savings in the first 10 years vs fixed** = ([30-year fixed payment] - [Monthly payment, years 1–10])×120

### Example values

How the main result changes when **Loan amount** changes and everything else stays at the example values above:

Loan amountMonthly payment, years 1–10200,0001,199.1300,0001,798.65400,0002,398.2500,0002,997.75600,0003,597.3800,0004,796.4

## Worked example

Inputs — Loan amount: $400,000; Initial rate (years 1–10): 6 %; Expected index at the reset (e.g. SOFR): 4 %; Margin: 2.75 %; First adjustment cap: 5 %; Lifetime cap (above the initial rate): 5 %; 30-year fixed rate for comparison: 6.4 %.

Results — **Monthly payment, years 1–10 = $2,398.20**; Balance after 10 years = $334,742.90; Rate after the first adjustment = 6.75 %; Payment after the first adjustment = $2,545.26; Worst-case payment (lifetime cap) = $3,455.18; 30-year fixed payment = $2,502.02; Savings in the first 10 years vs fixed = $12,458.58.

## FAQ

**What is a 10/1 ARM?**
A mortgage with a fixed rate for 10 years that then adjusts once a year.

**What do 5/1/5 caps mean?**
Up to 5 points at the first adjustment, 1 point per later adjustment and 5 points over the life of the loan.

**Is a 10/1 ARM risky?**
Less than shorter ARMs, but payments can rise sharply after year 10.

**What formula does the 10/1 ARM Calculator use?**
Payment during years 1–10 = pmt(start rate ÷ 12, 360, loan).


## Sources

- [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/)