5/1 ARM Mortgage Rate Calculator
A 5/1 adjustable-rate mortgage offers a fixed rate for the first 5 years, then adjusts annually based on market rates. The initial rate is typically lower than a 30-year fixed, but carries the risk of rate increases after year 5.
= $80,000
Payment Breakdown
Who Should Choose a 5/1 ARM Mortgage?
Buyers who plan to sell or refinance within 5 years, or those who expect rates to decrease.
5/1 ARM Payments by Home Price
| Home Price | Down (20%) | Monthly P&I | Total Interest | Total Cost |
|---|---|---|---|---|
| $150,000 | $30,000 | $739 | $145,990 | $265,990 |
| $200,000 | $40,000 | $985 | $194,653 | $354,653 |
| $250,000 | $50,000 | $1,231 | $243,316 | $443,316 |
| $300,000 | $60,000 | $1,478 | $291,980 | $531,980 |
| $350,000 | $70,000 | $1,724 | $340,643 | $620,643 |
| $400,000 | $80,000 | $1,970 | $389,306 | $709,306 |
| $450,000 | $90,000 | $2,217 | $437,969 | $797,969 |
| $500,000 | $100,000 | $2,463 | $486,633 | $886,633 |
| $600,000 | $120,000 | $2,955 | $583,959 | $1,063,959 |
| $700,000 | $140,000 | $3,448 | $681,286 | $1,241,286 |
| $750,000 | $150,000 | $3,694 | $729,949 | $1,329,949 |
| $800,000 | $160,000 | $3,941 | $778,612 | $1,418,612 |
| $900,000 | $180,000 | $4,433 | $875,939 | $1,595,939 |
| $1,000,000 | $200,000 | $4,926 | $973,266 | $1,773,266 |
$400,000 Home — 30-Year Term by Rate
| Rate | Monthly P&I | Total Interest | Total Cost |
|---|---|---|---|
| 5.5% | $1,817 | $334,093 | $654,093 |
| 6% | $1,919 | $370,682 | $690,682 |
| 6.5% | $2,023 | $408,142 | $728,142 |
| 6.75% | $2,076 | $427,185 | $747,185 |
| 7% | $2,129 | $446,428 | $766,428 |
| 7.25% | $2,183 | $465,867 | $785,867 |
| 7.5% | $2,237 | $485,495 | $805,495 |
| 8% | $2,348 | $525,297 | $845,297 |
5/1 ARM vs 30-Year Fixed Comparison
On a $400,000 home with 20% down:
| 5/1 ARM | 30-Year Fixed | Difference | |
|---|---|---|---|
| Rate | 6.25% | 7% | -0.75% |
| Monthly Payment | $1,970 | $2,129 | $159 |
| Total Interest | $389,306 | $446,428 | $57,122 |
| Total Cost | $709,306 | $766,428 | $57,122 |
Choosing a 5/1 ARM saves $57,122 in total interest compared to a 30-year fixed mortgage.
True Cost: 5/1 ARM Mortgage on a $400,000 Home
What to Know About 5/1 ARM Mortgages
An adjustable-rate mortgage like the 5/1 ARM offers a lower initial rate (6.25%) for the first 5 years, then adjusts annually based on market indexes. This can mean significant savings early on — but comes with rate risk after the fixed period ends.
- Best for short-term ownership. If you plan to sell or refinance within 5 years, you lock in a lower rate without facing adjustments.
- Understand rate caps. Most ARMs cap annual increases at 2% and lifetime increases at 5-6% above your start rate. Your worst-case payment on $400,000 could reach $3,108/month.
- Compare break-even. Calculate how many months of lower ARM payments it takes to offset the risk of future rate increases versus a fixed-rate mortgage.
- Refinance strategy. Many ARM borrowers plan to refinance into a fixed-rate mortgage before the adjustment period begins.
Frequently Asked Questions — 5/1 ARM Mortgages
What is the current 5/1 ARM mortgage rate?
Typical 5/1 ARM rates are around 6.25%. Rates vary by lender, credit score, and market conditions. Borrowers with 740+ credit scores often qualify for rates 0.25-0.5% below average.
What is the monthly payment on a 5/1 ARM mortgage?
On a $400,000 home with 20% down at 6.25%, the monthly payment is $1,970. Payments vary by home price — on a $300,000 home, it's $1,478/month.
Is a 5/1 ARM mortgage better than a 30-year fixed?
A 5/1 ARM starts with lower payments but carries rate adjustment risk after 5 years. Choose based on your timeline and risk tolerance.
How much total interest do I pay on a 5/1 ARM mortgage?
On a $400,000 home with 20% down, total interest over 30 years is $389,306 — that's 122% of the loan amount.
Can I refinance from a 5/1 ARM to a different term?
Yes. Refinancing lets you switch terms or rates when market conditions are favorable. Many ARM borrowers refinance into a fixed-rate before their adjustment period begins.
What credit score do I need for a 5/1 ARM mortgage?
Most lenders require 620+ for conventional 5/1 ARM mortgages. FHA loans accept 580+. For the best 5/1 ARM rates, aim for 740 or higher.
How do extra payments affect a 5/1 ARM mortgage?
Extra principal payments reduce your balance faster, saving interest and shortening your term. Even $100 extra per month on a $320,000 loan can save thousands in interest and pay off years early.
What happens after the 5-year fixed period?
After 5 years, your rate adjusts annually based on a market index plus a margin. Rate changes are typically capped at 2% per year and 5-6% over the life of the loan. If rates rise significantly, your payment could increase substantially.