Payment Shock
Payment shock occurs when the interest rate on an adjustable rate mortgage adjusts upward sharply. If the borrowers are unprepared they may find it difficult or impossible to make the monthly payments on time. Late payments can trigger penalties, more financial challenges and even lead to foreclosure.
In this example, the interest rate is fixed at 7.5% for two years. To illustrate payment shock we'll examine the worst case scenario where in the 2nd month the index rate increases to the maximum interest rate for the loan and stays there for the duration of the mortgage.
After reviewing this example enter your mortgage loan terms into the mortgage calculator or explore the other examples.
The amortization schedule shows that at the beginning of the third year the interest rate will jump to 13.5% thus increasing the borrowers' minimum monthly principal and interest payment from $1,398 to $2,260, an increase of approximately $862!
| Worst | ▲ | |||||
|---|---|---|---|---|---|---|
| Month | Interest Rate |
Index Rate |
Payment | Interest | Principal | Balance |
| 1 | 7.500% | 3.000% | $1,398 | $1,250 | $148 | $199,852 |
| 2 | 7.500% | 13.500% | $1,398 | $1,249 | $149 | $199,702 |
| 3 | 7.500% | 13.500% | $1,398 | $1,248 | $150 | $199,552 |
| 4 | 7.500% | 13.500% | $1,398 | $1,247 | $151 | $199,401 |
| 5 | 7.500% | 13.500% | $1,398 | $1,246 | $152 | $199,249 |
| 6 | 7.500% | 13.500% | $1,398 | $1,245 | $153 | $199,095 |
| 7 | 7.500% | 13.500% | $1,398 | $1,244 | $154 | $198,941 |
| 8 | 7.500% | 13.500% | $1,398 | $1,243 | $155 | $198,786 |
| 9 | 7.500% | 13.500% | $1,398 | $1,242 | $156 | $198,630 |
| 10 | 7.500% | 13.500% | $1,398 | $1,241 | $157 | $198,473 |
| 11 | 7.500% | 13.500% | $1,398 | $1,240 | $158 | $198,315 |
| 12 | 7.500% | 13.500% | $1,398 | $1,239 | $159 | $198,156 |
| Year 1 | $16,781 | $14,937 | $1,844 | |||
| 13 | 7.500% | 13.500% | $1,398 | $1,238 | $160 | $197,996 |
| 14 | 7.500% | 13.500% | $1,398 | $1,237 | $161 | $197,835 |
| 15 | 7.500% | 13.500% | $1,398 | $1,236 | $162 | $197,673 |
| 16 | 7.500% | 13.500% | $1,398 | $1,235 | $163 | $197,510 |
| 17 | 7.500% | 13.500% | $1,398 | $1,234 | $164 | $197,346 |
| 18 | 7.500% | 13.500% | $1,398 | $1,233 | $165 | $197,181 |
| 19 | 7.500% | 13.500% | $1,398 | $1,232 | $166 | $197,015 |
| 20 | 7.500% | 13.500% | $1,398 | $1,231 | $167 | $196,848 |
| 21 | 7.500% | 13.500% | $1,398 | $1,230 | $168 | $196,680 |
| 22 | 7.500% | 13.500% | $1,398 | $1,229 | $169 | $196,511 |
| 23 | 7.500% | 13.500% | $1,398 | $1,228 | $170 | $196,341 |
| 24 | 7.500% | 13.500% | $1,398 | $1,227 | $171 | $196,170 |
| Year 2 | $16,781 | $14,794 | $1,987 | |||
| 25 | 13.500% | 13.500% | $2,260 | $2,207 | $53 | $196,117 |
| 26 | 13.500% | 13.500% | $2,260 | $2,206 | $53 | $196,064 |
| 27 | 13.500% | 13.500% | $2,260 | $2,206 | $54 | $196,010 |
| 28 | 13.500% | 13.500% | $2,260 | $2,205 | $54 | $195,955 |
| 29 | 13.500% | 13.500% | $2,260 | $2,204 | $55 | $195,900 |
| 30 | 13.500% | 13.500% | $2,260 | $2,204 | $56 | $195,844 |
| 31 | 13.500% | 13.500% | $2,260 | $2,203 | $56 | $195,788 |
| 32 | 13.500% | 13.500% | $2,260 | $2,203 | $57 | $195,731 |
| 33 | 13.500% | 13.500% | $2,260 | $2,202 | $58 | $195,674 |
| 34 | 13.500% | 13.500% | $2,260 | $2,201 | $58 | $195,615 |
| 35 | 13.500% | 13.500% | $2,260 | $2,201 | $59 | $195,556 |
| 36 | 13.500% | 13.500% | $2,260 | $2,200 | $60 | $195,497 |
| Year 3 | $27,115 | $26,442 | $673 | |||
| 37 | 13.500% | 13.500% | $2,260 | $2,199 | $60 | $195,437 |
| 38 | 13.500% | 13.500% | $2,260 | $2,199 | $61 | $195,376 |
| 39 | 13.500% | 13.500% | $2,260 | $2,198 | $62 | $195,314 |
| 40 | 13.500% | 13.500% | $2,260 | $2,197 | $62 | $195,252 |
| 41 | 13.500% | 13.500% | $2,260 | $2,197 | $63 | $195,189 |
| 42 | 13.500% | 13.500% | $2,260 | $2,196 | $64 | $195,125 |
| 43 | 13.500% | 13.500% | $2,260 | $2,195 | $64 | $195,061 |
| 44 | 13.500% | 13.500% | $2,260 | $2,194 | $65 | $194,995 |
| 45 | 13.500% | 13.500% | $2,260 | $2,194 | $66 | $194,930 |
| 46 | 13.500% | 13.500% | $2,260 | $2,193 | $67 | $194,863 |
| 47 | 13.500% | 13.500% | $2,260 | $2,192 | $67 | $194,796 |
| 48 | 13.500% | 13.500% | $2,260 | $2,191 | $68 | $194,727 |
| Year 4 | $27,115 | $26,346 | $769 | |||
| 49 | 13.500% | 13.500% | $2,260 | $2,191 | $69 | $194,659 |
| 50 | 13.500% | 13.500% | $2,260 | $2,190 | $70 | $194,589 |
| 51 | 13.500% | 13.500% | $2,260 | $2,189 | $70 | $194,518 |
| 52 | 13.500% | 13.500% | $2,260 | $2,188 | $71 | $194,447 |
| 53 | 13.500% | 13.500% | $2,260 | $2,188 | $72 | $194,375 |
| 54 | 13.500% | 13.500% | $2,260 | $2,187 | $73 | $194,302 |
| 55 | 13.500% | 13.500% | $2,260 | $2,186 | $74 | $194,229 |
| 56 | 13.500% | 13.500% | $2,260 | $2,185 | $75 | $194,154 |
| 57 | 13.500% | 13.500% | $2,260 | $2,184 | $75 | $194,079 |
| 58 | 13.500% | 13.500% | $2,260 | $2,183 | $76 | $194,003 |
| 59 | 13.500% | 13.500% | $2,260 | $2,183 | $77 | $193,926 |
| 60 | 13.500% | 13.500% | $2,260 | $2,182 | $78 | $193,848 |
| Year 5 | $27,115 | $26,235 | $880 | |||
| 61 | 13.500% | 13.500% | $2,260 | $2,181 | $79 | $193,769 |
| 62 | 13.500% | 13.500% | $2,260 | $2,180 | $80 | $193,689 |
| 63 | 13.500% | 13.500% | $2,260 | $2,179 | $81 | $193,609 |
| 64 | 13.500% | 13.500% | $2,260 | $2,178 | $81 | $193,527 |
| 65 | 13.500% | 13.500% | $2,260 | $2,177 | $82 | $193,445 |
| 66 | 13.500% | 13.500% | $2,260 | $2,176 | $83 | $193,361 |
| 67 | 13.500% | 13.500% | $2,260 | $2,175 | $84 | $193,277 |
| 68 | 13.500% | 13.500% | $2,260 | $2,174 | $85 | $193,192 |
| 69 | 13.500% | 13.500% | $2,260 | $2,173 | $86 | $193,106 |
| 70 | 13.500% | 13.500% | $2,260 | $2,172 | $87 | $193,019 |
| 71 | 13.500% | 13.500% | $2,260 | $2,171 | $88 | $192,930 |
| 72 | 13.500% | 13.500% | $2,260 | $2,170 | $89 | $192,841 |
| Year 6 | $27,115 | $26,109 | $1,006 | |||
| 73 | 13.500% | 13.500% | $2,260 | $2,169 | $90 | $192,751 |
| 74 | 13.500% | 13.500% | $2,260 | $2,168 | $91 | $192,660 |
| 75 | 13.500% | 13.500% | $2,260 | $2,167 | $92 | $192,568 |
| 76 | 13.500% | 13.500% | $2,260 | $2,166 | $93 | $192,475 |
| 77 | 13.500% | 13.500% | $2,260 | $2,165 | $94 | $192,381 |
| 78 | 13.500% | 13.500% | $2,260 | $2,164 | $95 | $192,285 |
| 79 | 13.500% | 13.500% | $2,260 | $2,163 | $96 | $192,189 |
| 80 | 13.500% | 13.500% | $2,260 | $2,162 | $97 | $192,091 |
| 81 | 13.500% | 13.500% | $2,260 | $2,161 | $99 | $191,993 |
| 82 | 13.500% | 13.500% | $2,260 | $2,160 | $100 | $191,893 |
| 83 | 13.500% | 13.500% | $2,260 | $2,159 | $101 | $191,792 |
| 84 | 13.500% | 13.500% | $2,260 | $2,158 | $102 | $191,690 |
| Year 7 | $27,115 | $25,964 | $1,151 | |||
| 85 | 13.500% | 13.500% | $2,260 | $2,157 | $103 | $191,587 |
| 86 | 13.500% | 13.500% | $2,260 | $2,155 | $104 | $191,483 |
| 87 | 13.500% | 13.500% | $2,260 | $2,154 | $105 | $191,378 |
| 88 | 13.500% | 13.500% | $2,260 | $2,153 | $107 | $191,271 |
| 89 | 13.500% | 13.500% | $2,260 | $2,152 | $108 | $191,163 |
| 90 | 13.500% | 13.500% | $2,260 | $2,151 | $109 | $191,054 |
| 91 | 13.500% | 13.500% | $2,260 | $2,149 | $110 | $190,944 |
| 92 | 13.500% | 13.500% | $2,260 | $2,148 | $111 | $190,833 |
| 93 | 13.500% | 13.500% | $2,260 | $2,147 | $113 | $190,720 |
| 94 | 13.500% | 13.500% | $2,260 | $2,146 | $114 | $190,606 |
| 95 | 13.500% | 13.500% | $2,260 | $2,144 | $115 | $190,491 |
| 96 | 13.500% | 13.500% | $2,260 | $2,143 | $117 | $190,374 |
| Year 8 | $27,115 | $25,799 | $1,316 | |||
| 97 | 13.500% | 13.500% | $2,260 | $2,142 | $118 | $190,256 |
| 98 | 13.500% | 13.500% | $2,260 | $2,140 | $119 | $190,137 |
| 99 | 13.500% | 13.500% | $2,260 | $2,139 | $121 | $190,017 |
| 100 | 13.500% | 13.500% | $2,260 | $2,138 | $122 | $189,895 |
| 101 | 13.500% | 13.500% | $2,260 | $2,136 | $123 | $189,772 |
| 102 | 13.500% | 13.500% | $2,260 | $2,135 | $125 | $189,647 |
| 103 | 13.500% | 13.500% | $2,260 | $2,134 | $126 | $189,521 |
| 104 | 13.500% | 13.500% | $2,260 | $2,132 | $127 | $189,393 |
| 105 | 13.500% | 13.500% | $2,260 | $2,131 | $129 | $189,264 |
| 106 | 13.500% | 13.500% | $2,260 | $2,129 | $130 | $189,134 |
| 107 | 13.500% | 13.500% | $2,260 | $2,128 | $132 | $189,002 |
| 108 | 13.500% | 13.500% | $2,260 | $2,126 | $133 | $188,869 |
| Year 9 | $27,115 | $25,610 | $1,505 | |||
| 109 | 13.500% | 13.500% | $2,260 | $2,125 | $135 | $188,734 |
| 110 | 13.500% | 13.500% | $2,260 | $2,123 | $136 | $188,598 |
| 111 | 13.500% | 13.500% | $2,260 | $2,122 | $138 | $188,460 |
| 112 | 13.500% | 13.500% | $2,260 | $2,120 | $139 | $188,321 |
| 113 | 13.500% | 13.500% | $2,260 | $2,119 | $141 | $188,180 |
| 114 | 13.500% | 13.500% | $2,260 | $2,117 | $143 | $188,037 |
| 115 | 13.500% | 13.500% | $2,260 | $2,115 | $144 | $187,893 |
| 116 | 13.500% | 13.500% | $2,260 | $2,114 | $146 | $187,747 |
| 117 | 13.500% | 13.500% | $2,260 | $2,112 | $147 | $187,600 |
| 118 | 13.500% | 13.500% | $2,260 | $2,110 | $149 | $187,451 |
| 119 | 13.500% | 13.500% | $2,260 | $2,109 | $151 | $187,300 |
| 120 | 13.500% | 13.500% | $2,260 | $2,107 | $152 | $187,147 |
| Year 10 | $27,115 | $25,393 | $1,722 | |||
| 121 | 13.500% | 13.500% | $2,260 | $2,105 | $154 | $186,993 |
| 122 | 13.500% | 13.500% | $2,260 | $2,104 | $156 | $186,837 |
| 123 | 13.500% | 13.500% | $2,260 | $2,102 | $158 | $186,680 |
| 124 | 13.500% | 13.500% | $2,260 | $2,100 | $159 | $186,520 |
| 125 | 13.500% | 13.500% | $2,260 | $2,098 | $161 | $186,359 |
| 126 | 13.500% | 13.500% | $2,260 | $2,097 | $163 | $186,196 |
| 127 | 13.500% | 13.500% | $2,260 | $2,095 | $165 | $186,031 |
| 128 | 13.500% | 13.500% | $2,260 | $2,093 | $167 | $185,864 |
| 129 | 13.500% | 13.500% | $2,260 | $2,091 | $169 | $185,696 |
| 130 | 13.500% | 13.500% | $2,260 | $2,089 | $170 | $185,525 |
| 131 | 13.500% | 13.500% | $2,260 | $2,087 | $172 | $185,353 |
| 132 | 13.500% | 13.500% | $2,260 | $2,085 | $174 | $185,178 |
| Year 11 | $27,115 | $25,146 | $1,969 | |||
| 133 | 13.500% | 13.500% | $2,260 | $2,083 | $176 | $185,002 |
| 134 | 13.500% | 13.500% | $2,260 | $2,081 | $178 | $184,824 |
| 135 | 13.500% | 13.500% | $2,260 | $2,079 | $180 | $184,644 |
| 136 | 13.500% | 13.500% | $2,260 | $2,077 | $182 | $184,461 |
| 137 | 13.500% | 13.500% | $2,260 | $2,075 | $184 | $184,277 |
| 138 | 13.500% | 13.500% | $2,260 | $2,073 | $186 | $184,090 |
| 139 | 13.500% | 13.500% | $2,260 | $2,071 | $189 | $183,902 |
| 140 | 13.500% | 13.500% | $2,260 | $2,069 | $191 | $183,711 |
| 141 | 13.500% | 13.500% | $2,260 | $2,067 | $193 | $183,518 |
| 142 | 13.500% | 13.500% | $2,260 | $2,065 | $195 | $183,323 |
| 143 | 13.500% | 13.500% | $2,260 | $2,062 | $197 | $183,126 |
| 144 | 13.500% | 13.500% | $2,260 | $2,060 | $199 | $182,927 |
| Year 12 | $27,115 | $24,863 | $2,252 | |||
| 145 | 13.500% | 13.500% | $2,260 | $2,058 | $202 | $182,725 |
| 146 | 13.500% | 13.500% | $2,260 | $2,056 | $204 | $182,521 |
| 147 | 13.500% | 13.500% | $2,260 | $2,053 | $206 | $182,315 |
| 148 | 13.500% | 13.500% | $2,260 | $2,051 | $209 | $182,106 |
| 149 | 13.500% | 13.500% | $2,260 | $2,049 | $211 | $181,895 |
| 150 | 13.500% | 13.500% | $2,260 | $2,046 | $213 | $181,682 |
| 151 | 13.500% | 13.500% | $2,260 | $2,044 | $216 | $181,466 |
| 152 | 13.500% | 13.500% | $2,260 | $2,042 | $218 | $181,248 |
| 153 | 13.500% | 13.500% | $2,260 | $2,039 | $221 | $181,028 |
| 154 | 13.500% | 13.500% | $2,260 | $2,037 | $223 | $180,805 |
| 155 | 13.500% | 13.500% | $2,260 | $2,034 | $226 | $180,579 |
| 156 | 13.500% | 13.500% | $2,260 | $2,032 | $228 | $180,351 |
| Year 13 | $27,115 | $24,540 | $2,575 | |||
| 157 | 13.500% | 13.500% | $2,260 | $2,029 | $231 | $180,121 |
| 158 | 13.500% | 13.500% | $2,260 | $2,026 | $233 | $179,887 |
| 159 | 13.500% | 13.500% | $2,260 | $2,024 | $236 | $179,652 |
| 160 | 13.500% | 13.500% | $2,260 | $2,021 | $238 | $179,413 |
| 161 | 13.500% | 13.500% | $2,260 | $2,018 | $241 | $179,172 |
| 162 | 13.500% | 13.500% | $2,260 | $2,016 | $244 | $178,928 |
| 163 | 13.500% | 13.500% | $2,260 | $2,013 | $247 | $178,681 |
| 164 | 13.500% | 13.500% | $2,260 | $2,010 | $249 | $178,432 |
| 165 | 13.500% | 13.500% | $2,260 | $2,007 | $252 | $178,180 |
| 166 | 13.500% | 13.500% | $2,260 | $2,005 | $255 | $177,925 |
| 167 | 13.500% | 13.500% | $2,260 | $2,002 | $258 | $177,667 |
| 168 | 13.500% | 13.500% | $2,260 | $1,999 | $261 | $177,406 |
| Year 14 | $27,115 | $24,170 | $2,945 | |||
| 169 | 13.500% | 13.500% | $2,260 | $1,996 | $264 | $177,142 |
| 170 | 13.500% | 13.500% | $2,260 | $1,993 | $267 | $176,875 |
| 171 | 13.500% | 13.500% | $2,260 | $1,990 | $270 | $176,606 |
| 172 | 13.500% | 13.500% | $2,260 | $1,987 | $273 | $176,333 |
| 173 | 13.500% | 13.500% | $2,260 | $1,984 | $276 | $176,057 |
| 174 | 13.500% | 13.500% | $2,260 | $1,981 | $279 | $175,778 |
| 175 | 13.500% | 13.500% | $2,260 | $1,978 | $282 | $175,496 |
| 176 | 13.500% | 13.500% | $2,260 | $1,974 | $285 | $175,211 |
| 177 | 13.500% | 13.500% | $2,260 | $1,971 | $288 | $174,922 |
| 178 | 13.500% | 13.500% | $2,260 | $1,968 | $292 | $174,631 |
| 179 | 13.500% | 13.500% | $2,260 | $1,965 | $295 | $174,336 |
| 180 | 13.500% | 13.500% | $2,260 | $1,961 | $298 | $174,037 |
| Year 15 | $27,115 | $23,746 | $3,369 | |||
| 181 | 13.500% | 13.500% | $2,260 | $1,958 | $302 | $173,736 |
| 182 | 13.500% | 13.500% | $2,260 | $1,955 | $305 | $173,431 |
| 183 | 13.500% | 13.500% | $2,260 | $1,951 | $308 | $173,122 |
| 184 | 13.500% | 13.500% | $2,260 | $1,948 | $312 | $172,810 |
| 185 | 13.500% | 13.500% | $2,260 | $1,944 | $315 | $172,495 |
| 186 | 13.500% | 13.500% | $2,260 | $1,941 | $319 | $172,176 |
| 187 | 13.500% | 13.500% | $2,260 | $1,937 | $323 | $171,853 |
| 188 | 13.500% | 13.500% | $2,260 | $1,933 | $326 | $171,527 |
| 189 | 13.500% | 13.500% | $2,260 | $1,930 | $330 | $171,197 |
| 190 | 13.500% | 13.500% | $2,260 | $1,926 | $334 | $170,863 |
| 191 | 13.500% | 13.500% | $2,260 | $1,922 | $337 | $170,526 |
| 192 | 13.500% | 13.500% | $2,260 | $1,918 | $341 | $170,185 |
| Year 16 | $27,115 | $23,262 | $3,853 | |||
| 193 | 13.500% | 13.500% | $2,260 | $1,915 | $345 | $169,840 |
| 194 | 13.500% | 13.500% | $2,260 | $1,911 | $349 | $169,491 |
| 195 | 13.500% | 13.500% | $2,260 | $1,907 | $353 | $169,138 |
| 196 | 13.500% | 13.500% | $2,260 | $1,903 | $357 | $168,781 |
| 197 | 13.500% | 13.500% | $2,260 | $1,899 | $361 | $168,421 |
| 198 | 13.500% | 13.500% | $2,260 | $1,895 | $365 | $168,056 |
| 199 | 13.500% | 13.500% | $2,260 | $1,891 | $369 | $167,687 |
| 200 | 13.500% | 13.500% | $2,260 | $1,886 | $373 | $167,314 |
| 201 | 13.500% | 13.500% | $2,260 | $1,882 | $377 | $166,936 |
| 202 | 13.500% | 13.500% | $2,260 | $1,878 | $382 | $166,555 |
| 203 | 13.500% | 13.500% | $2,260 | $1,874 | $386 | $166,169 |
| 204 | 13.500% | 13.500% | $2,260 | $1,869 | $390 | $165,779 |
| Year 17 | $27,115 | $22,709 | $4,406 | |||
| 205 | 13.500% | 13.500% | $2,260 | $1,865 | $395 | $165,384 |
| 206 | 13.500% | 13.500% | $2,260 | $1,861 | $399 | $164,985 |
| 207 | 13.500% | 13.500% | $2,260 | $1,856 | $404 | $164,582 |
| 208 | 13.500% | 13.500% | $2,260 | $1,852 | $408 | $164,174 |
| 209 | 13.500% | 13.500% | $2,260 | $1,847 | $413 | $163,761 |
| 210 | 13.500% | 13.500% | $2,260 | $1,842 | $417 | $163,344 |
| 211 | 13.500% | 13.500% | $2,260 | $1,838 | $422 | $162,922 |
| 212 | 13.500% | 13.500% | $2,260 | $1,833 | $427 | $162,495 |
| 213 | 13.500% | 13.500% | $2,260 | $1,828 | $432 | $162,064 |
| 214 | 13.500% | 13.500% | $2,260 | $1,823 | $436 | $161,627 |
| 215 | 13.500% | 13.500% | $2,260 | $1,818 | $441 | $161,186 |
| 216 | 13.500% | 13.500% | $2,260 | $1,813 | $446 | $160,740 |
| Year 18 | $27,115 | $22,076 | $5,039 | |||
| 217 | 13.500% | 13.500% | $2,260 | $1,808 | $451 | $160,288 |
| 218 | 13.500% | 13.500% | $2,260 | $1,803 | $456 | $159,832 |
| 219 | 13.500% | 13.500% | $2,260 | $1,798 | $461 | $159,371 |
| 220 | 13.500% | 13.500% | $2,260 | $1,793 | $467 | $158,904 |
| 221 | 13.500% | 13.500% | $2,260 | $1,788 | $472 | $158,432 |
| 222 | 13.500% | 13.500% | $2,260 | $1,782 | $477 | $157,955 |
| 223 | 13.500% | 13.500% | $2,260 | $1,777 | $483 | $157,472 |
| 224 | 13.500% | 13.500% | $2,260 | $1,772 | $488 | $156,984 |
| 225 | 13.500% | 13.500% | $2,260 | $1,766 | $494 | $156,491 |
| 226 | 13.500% | 13.500% | $2,260 | $1,761 | $499 | $155,992 |
| 227 | 13.500% | 13.500% | $2,260 | $1,755 | $505 | $155,487 |
| 228 | 13.500% | 13.500% | $2,260 | $1,749 | $510 | $154,977 |
| Year 19 | $27,115 | $21,352 | $5,763 | |||
| 229 | 13.500% | 13.500% | $2,260 | $1,743 | $516 | $154,461 |
| 230 | 13.500% | 13.500% | $2,260 | $1,738 | $522 | $153,939 |
| 231 | 13.500% | 13.500% | $2,260 | $1,732 | $528 | $153,411 |
| 232 | 13.500% | 13.500% | $2,260 | $1,726 | $534 | $152,877 |
| 233 | 13.500% | 13.500% | $2,260 | $1,720 | $540 | $152,337 |
| 234 | 13.500% | 13.500% | $2,260 | $1,714 | $546 | $151,792 |
| 235 | 13.500% | 13.500% | $2,260 | $1,708 | $552 | $151,240 |
| 236 | 13.500% | 13.500% | $2,260 | $1,701 | $558 | $150,682 |
| 237 | 13.500% | 13.500% | $2,260 | $1,695 | $564 | $150,117 |
| 238 | 13.500% | 13.500% | $2,260 | $1,689 | $571 | $149,546 |
| 239 | 13.500% | 13.500% | $2,260 | $1,682 | $577 | $148,969 |
| 240 | 13.500% | 13.500% | $2,260 | $1,676 | $584 | $148,386 |
| Year 20 | $27,115 | $20,524 | $6,591 | |||
| 241 | 13.500% | 13.500% | $2,260 | $1,669 | $590 | $147,795 |
| 242 | 13.500% | 13.500% | $2,260 | $1,663 | $597 | $147,198 |
| 243 | 13.500% | 13.500% | $2,260 | $1,656 | $604 | $146,595 |
| 244 | 13.500% | 13.500% | $2,260 | $1,649 | $610 | $145,985 |
| 245 | 13.500% | 13.500% | $2,260 | $1,642 | $617 | $145,367 |
| 246 | 13.500% | 13.500% | $2,260 | $1,635 | $624 | $144,743 |
| 247 | 13.500% | 13.500% | $2,260 | $1,628 | $631 | $144,112 |
| 248 | 13.500% | 13.500% | $2,260 | $1,621 | $638 | $143,474 |
| 249 | 13.500% | 13.500% | $2,260 | $1,614 | $646 | $142,828 |
| 250 | 13.500% | 13.500% | $2,260 | $1,607 | $653 | $142,175 |
| 251 | 13.500% | 13.500% | $2,260 | $1,599 | $660 | $141,515 |
| 252 | 13.500% | 13.500% | $2,260 | $1,592 | $668 | $140,848 |
| Year 21 | $27,115 | $19,577 | $7,538 | |||
| 253 | 13.500% | 13.500% | $2,260 | $1,585 | $675 | $140,173 |
| 254 | 13.500% | 13.500% | $2,260 | $1,577 | $683 | $139,490 |
| 255 | 13.500% | 13.500% | $2,260 | $1,569 | $690 | $138,800 |
| 256 | 13.500% | 13.500% | $2,260 | $1,562 | $698 | $138,102 |
| 257 | 13.500% | 13.500% | $2,260 | $1,554 | $706 | $137,396 |
| 258 | 13.500% | 13.500% | $2,260 | $1,546 | $714 | $136,682 |
| 259 | 13.500% | 13.500% | $2,260 | $1,538 | $722 | $135,960 |
| 260 | 13.500% | 13.500% | $2,260 | $1,530 | $730 | $135,230 |
| 261 | 13.500% | 13.500% | $2,260 | $1,521 | $738 | $134,492 |
| 262 | 13.500% | 13.500% | $2,260 | $1,513 | $747 | $133,745 |
| 263 | 13.500% | 13.500% | $2,260 | $1,505 | $755 | $132,990 |
| 264 | 13.500% | 13.500% | $2,260 | $1,496 | $763 | $132,227 |
| Year 22 | $27,115 | $18,494 | $8,621 | |||
| 265 | 13.500% | 13.500% | $2,260 | $1,488 | $772 | $131,455 |
| 266 | 13.500% | 13.500% | $2,260 | $1,479 | $781 | $130,674 |
| 267 | 13.500% | 13.500% | $2,260 | $1,470 | $790 | $129,884 |
| 268 | 13.500% | 13.500% | $2,260 | $1,461 | $798 | $129,086 |
| 269 | 13.500% | 13.500% | $2,260 | $1,452 | $807 | $128,279 |
| 270 | 13.500% | 13.500% | $2,260 | $1,443 | $816 | $127,462 |
| 271 | 13.500% | 13.500% | $2,260 | $1,434 | $826 | $126,637 |
| 272 | 13.500% | 13.500% | $2,260 | $1,425 | $835 | $125,802 |
| 273 | 13.500% | 13.500% | $2,260 | $1,415 | $844 | $124,957 |
| 274 | 13.500% | 13.500% | $2,260 | $1,406 | $854 | $124,103 |
| 275 | 13.500% | 13.500% | $2,260 | $1,396 | $863 | $123,240 |
| 276 | 13.500% | 13.500% | $2,260 | $1,386 | $873 | $122,367 |
| Year 23 | $27,115 | $17,255 | $9,860 | |||
| 277 | 13.500% | 13.500% | $2,260 | $1,377 | $883 | $121,484 |
| 278 | 13.500% | 13.500% | $2,260 | $1,367 | $893 | $120,591 |
| 279 | 13.500% | 13.500% | $2,260 | $1,357 | $903 | $119,688 |
| 280 | 13.500% | 13.500% | $2,260 | $1,346 | $913 | $118,775 |
| 281 | 13.500% | 13.500% | $2,260 | $1,336 | $923 | $117,852 |
| 282 | 13.500% | 13.500% | $2,260 | $1,326 | $934 | $116,918 |
| 283 | 13.500% | 13.500% | $2,260 | $1,315 | $944 | $115,974 |
| 284 | 13.500% | 13.500% | $2,260 | $1,305 | $955 | $115,019 |
| 285 | 13.500% | 13.500% | $2,260 | $1,294 | $966 | $114,053 |
| 286 | 13.500% | 13.500% | $2,260 | $1,283 | $976 | $113,077 |
| 287 | 13.500% | 13.500% | $2,260 | $1,272 | $987 | $112,089 |
| 288 | 13.500% | 13.500% | $2,260 | $1,261 | $999 | $111,091 |
| Year 24 | $27,115 | $15,839 | $11,276 | |||
| 289 | 13.500% | 13.500% | $2,260 | $1,250 | $1,010 | $110,081 |
| 290 | 13.500% | 13.500% | $2,260 | $1,238 | $1,021 | $109,060 |
| 291 | 13.500% | 13.500% | $2,260 | $1,227 | $1,033 | $108,027 |
| 292 | 13.500% | 13.500% | $2,260 | $1,215 | $1,044 | $106,983 |
| 293 | 13.500% | 13.500% | $2,260 | $1,204 | $1,056 | $105,927 |
| 294 | 13.500% | 13.500% | $2,260 | $1,192 | $1,068 | $104,859 |
| 295 | 13.500% | 13.500% | $2,260 | $1,180 | $1,080 | $103,779 |
| 296 | 13.500% | 13.500% | $2,260 | $1,168 | $1,092 | $102,687 |
| 297 | 13.500% | 13.500% | $2,260 | $1,155 | $1,104 | $101,583 |
| 298 | 13.500% | 13.500% | $2,260 | $1,143 | $1,117 | $100,466 |
| 299 | 13.500% | 13.500% | $2,260 | $1,130 | $1,129 | $99,336 |
| 300 | 13.500% | 13.500% | $2,260 | $1,118 | $1,142 | $98,194 |
| Year 25 | $27,115 | $14,219 | $12,896 | |||
| 301 | 13.500% | 13.500% | $2,260 | $1,105 | $1,155 | $97,039 |
| 302 | 13.500% | 13.500% | $2,260 | $1,092 | $1,168 | $95,872 |
| 303 | 13.500% | 13.500% | $2,260 | $1,079 | $1,181 | $94,691 |
| 304 | 13.500% | 13.500% | $2,260 | $1,065 | $1,194 | $93,496 |
| 305 | 13.500% | 13.500% | $2,260 | $1,052 | $1,208 | $92,288 |
| 306 | 13.500% | 13.500% | $2,260 | $1,038 | $1,221 | $91,067 |
| 307 | 13.500% | 13.500% | $2,260 | $1,025 | $1,235 | $89,832 |
| 308 | 13.500% | 13.500% | $2,260 | $1,011 | $1,249 | $88,583 |
| 309 | 13.500% | 13.500% | $2,260 | $997 | $1,263 | $87,320 |
| 310 | 13.500% | 13.500% | $2,260 | $982 | $1,277 | $86,043 |
| 311 | 13.500% | 13.500% | $2,260 | $968 | $1,292 | $84,751 |
| 312 | 13.500% | 13.500% | $2,260 | $953 | $1,306 | $83,445 |
| Year 26 | $27,115 | $12,366 | $14,749 | |||
| 313 | 13.500% | 13.500% | $2,260 | $939 | $1,321 | $82,124 |
| 314 | 13.500% | 13.500% | $2,260 | $924 | $1,336 | $80,789 |
| 315 | 13.500% | 13.500% | $2,260 | $909 | $1,351 | $79,438 |
| 316 | 13.500% | 13.500% | $2,260 | $894 | $1,366 | $78,072 |
| 317 | 13.500% | 13.500% | $2,260 | $878 | $1,381 | $76,691 |
| 318 | 13.500% | 13.500% | $2,260 | $863 | $1,397 | $75,294 |
| 319 | 13.500% | 13.500% | $2,260 | $847 | $1,413 | $73,881 |
| 320 | 13.500% | 13.500% | $2,260 | $831 | $1,428 | $72,453 |
| 321 | 13.500% | 13.500% | $2,260 | $815 | $1,444 | $71,009 |
| 322 | 13.500% | 13.500% | $2,260 | $799 | $1,461 | $69,548 |
| 323 | 13.500% | 13.500% | $2,260 | $782 | $1,477 | $68,071 |
| 324 | 13.500% | 13.500% | $2,260 | $766 | $1,494 | $66,577 |
| Year 27 | $27,115 | $10,247 | $16,868 | |||
| 325 | 13.500% | 13.500% | $2,260 | $749 | $1,511 | $65,066 |
| 326 | 13.500% | 13.500% | $2,260 | $732 | $1,528 | $63,539 |
| 327 | 13.500% | 13.500% | $2,260 | $715 | $1,545 | $61,994 |
| 328 | 13.500% | 13.500% | $2,260 | $697 | $1,562 | $60,432 |
| 329 | 13.500% | 13.500% | $2,260 | $680 | $1,580 | $58,852 |
| 330 | 13.500% | 13.500% | $2,260 | $662 | $1,597 | $57,255 |
| 331 | 13.500% | 13.500% | $2,260 | $644 | $1,615 | $55,639 |
| 332 | 13.500% | 13.500% | $2,260 | $626 | $1,634 | $54,005 |
| 333 | 13.500% | 13.500% | $2,260 | $608 | $1,652 | $52,353 |
| 334 | 13.500% | 13.500% | $2,260 | $589 | $1,671 | $50,683 |
| 335 | 13.500% | 13.500% | $2,260 | $570 | $1,689 | $48,993 |
| 336 | 13.500% | 13.500% | $2,260 | $551 | $1,708 | $47,285 |
| Year 28 | $27,115 | $7,823 | $19,292 | |||
| 337 | 13.500% | 13.500% | $2,260 | $532 | $1,728 | $45,557 |
| 338 | 13.500% | 13.500% | $2,260 | $513 | $1,747 | $43,810 |
| 339 | 13.500% | 13.500% | $2,260 | $493 | $1,767 | $42,044 |
| 340 | 13.500% | 13.500% | $2,260 | $473 | $1,787 | $40,257 |
| 341 | 13.500% | 13.500% | $2,260 | $453 | $1,807 | $38,450 |
| 342 | 13.500% | 13.500% | $2,260 | $433 | $1,827 | $36,623 |
| 343 | 13.500% | 13.500% | $2,260 | $412 | $1,848 | $34,776 |
| 344 | 13.500% | 13.500% | $2,260 | $391 | $1,868 | $32,907 |
| 345 | 13.500% | 13.500% | $2,260 | $370 | $1,889 | $31,018 |
| 346 | 13.500% | 13.500% | $2,260 | $349 | $1,911 | $29,107 |
| 347 | 13.500% | 13.500% | $2,260 | $327 | $1,932 | $27,175 |
| 348 | 13.500% | 13.500% | $2,260 | $306 | $1,954 | $25,221 |
| Year 29 | $27,115 | $5,051 | $22,064 | |||
| 349 | 13.500% | 13.500% | $2,260 | $284 | $1,976 | $23,246 |
| 350 | 13.500% | 13.500% | $2,260 | $262 | $1,998 | $21,248 |
| 351 | 13.500% | 13.500% | $2,260 | $239 | $2,021 | $19,227 |
| 352 | 13.500% | 13.500% | $2,260 | $216 | $2,043 | $17,184 |
| 353 | 13.500% | 13.500% | $2,260 | $193 | $2,066 | $15,117 |
| 354 | 13.500% | 13.500% | $2,260 | $170 | $2,090 | $13,028 |
| 355 | 13.500% | 13.500% | $2,260 | $147 | $2,113 | $10,915 |
| 356 | 13.500% | 13.500% | $2,260 | $123 | $2,137 | $8,778 |
| 357 | 13.500% | 13.500% | $2,260 | $99 | $2,161 | $6,617 |
| 358 | 13.500% | 13.500% | $2,260 | $74 | $2,185 | $4,432 |
| 359 | 13.500% | 13.500% | $2,260 | $50 | $2,210 | $2,222 |
| 360 | 13.500% | 13.500% | $2,247 | $25 | $2,222 | $0 |
| Year 30 | $27,103 | $1,881 | $25,221 | |||
| Grand Total | $792,769 | $592,769 | $200,000 |
The Basics
- The Floor Rate Matters
- Margin Makes a Difference
- Payment Shock
- Interest Rate Caps are Important
- Compare Future Interest Rate Scenarios
Common Loan Types
Other Examples
Mortgage Calculator - Help
- Amortization Schedule
- The amortization schedule show you how monthly principal and interest payment and principal balances change over the life of your loan.
- Floor Rate
- Floor rate is the minimum interest rate for an adjustable rate mortgage (ARM).
- Index Rate
- Rate Adjustment on ARMs are based on the index rate, the margin, the adjustment schedule, interest rate caps, and floor rate specified in your loan documents. Index rates change over time. They should be published and widely available. Common indexes used for setting mortgage rates have include the Prime Rate, Libor (London Interbank Offer Rate) and U.S. Treasury Rates.
- Interest
- The portion of your mortgage payment that is due to the interest rate being applied to the principal balance. The Total Interest for a mortgage is the sum of all interest paid over the life of a loan.
- Interest Rate Adjustments
- The interest rate changes on an adjustable rate mortage (ARM) during adjustment periods specified in your loan documents. Your interest rate may have a fixed period where it does not change followed by adjustements on a regularly scheduled basis. For example, the interest rate on a mortgage could be fixed for 2 years followed by adjustments every 6 months.
- Interest Rate Caps
- Limits how much your interest rate can be increased during each adjustment period for an ARM. The cap for the first adjustment period may be different than the cap on subsequent adjustments. There also may be a maximim overall cap on interest rate increases during the life of your loan.
- Interest Rate Scenarios
- To decide if an adjustable rate mortgage is right for you, you should how changes in interest rates will effect the mortgage. The adjustable rate mortgage calculator shows you how your payment changes in the best case where rates are set at the minimum for your mortgage, the worst case where rates are set at the maximum for your mortgage, and the stable case where rates remain constant for your mortgage.
- Loan Amount
- The initial principal balance or your mortgage at closing.
- Margin
- When an ARM adjusts the margin is added to the index rate to help determine your interest rate. Interest rate caps and the floor rate for your mortgage may limit how much your actual interest rate changes. The margin typically is fixed for the life of the loan. It should be clearly specified in your loan documents.
- Payment Shock
- Occurs when the required minimum payment for a mortgage increases significantly. This can occur on adjustable rate mortgage when interest rates rise sharply, on interest-only mortgages when the interest-only period ends, and on balloon mortgages when the balloon payment is due.
- Principal
- The portion of your mortgage payment that is used to pay down the current balance of your mortgage. The principal balance represents how much you owe on the mortgage.
- Start Rate
- The initial interest rate on an Adjustable Rate Mortgage.
- Term
- The amortization term is one of the key factors that determine your required mortgage payment. Your required mortgage payment for fully amortizing mortgages is the amount that would result in the mortgage being closest to being paid off by the end of the amortization term. Longer amortization terms result in lower required mortgage payments for fully amortizating mortgages, all other things being equal.