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An FHA 3/1 ARM can make homeownership more affordable with a lower starting rate. This calculator helps you see how your payment may adjust over time - so you can plan ahead with clarity and confidence.

3/1 ARM Calculator with Extra Payment & Interest Only Option

Are you aware that a savvy choice in mortgage types could potentially save you thousands over time? The 3/1 ARM Calculator with Extra Payment & Interest Only Option presents a compelling avenue for those looking to maximize their financial benefits. This article aims to demystify the calculator's functionalities and discuss how extra payments or interest-only options can impact your overall mortgage costs. By reading on, you will gain valuable insights into how these variables can be tailored to fit your financial goals.
See additional information below the calculator.

3/1 ARM Calculator

Calculate your adjustable-rate mortgage payments with precision

Basic Loan Information

ARM Adjustment Details

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

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
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=

Current Interest Rate + Annual Cap = Interest Rate
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Optional Settings

Payment Summary

Initial Monthly Payment

$0

Your fixed payment for the first 3 years

First Adjustment Payment

$0

Year 4 payment (rate + 1%)

Maximum Payment

$0

At lifetime cap (initial rate + 5%)

Total Interest (Worst-Case)

$0

Based on +1% annual increases to cap

Amortization Schedule (Worst-Case Scenario)

Shows rates increasing by 1% annually after year 3, 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 are the best sources for the 1-Year CMT index used for FHA ARMs:

1. U.S. Department of Treasury (Official Source)
> Daily Treasury Par Yield Curve Rates: https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve
Click “Apply” and look under the one-year column. Scroll to the bottom of the table to see the current index rate.

2. Easiest Option – 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 Your VA 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 1% 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 3 years for a 3/1 ARM), and the new rate will apply for the next adjustment period.

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