7/1 ARM mortgage calculator
Same reset-period payment-shock framing as the 5/1 — but two extra years of fixed-rate certainty before the first reset. The teaser typically runs 0.125-0.25pp above an equivalent 5/1 in exchange. Worth it if you're uncertain about your timeline, want to bracket rates further out, or expect rates to drop before reset.
Last updated 2026-05-13
- 30-yr fixed @ 6.50%
- $510,178
- ARM, rates stay flat
- $440,345
- ARM, your expectation
- $515,152
- ARM, lifetime cap
- $760,907
MethodologyChoosing between 5/1, 7/1, and 10/1
Choosing between 5/1, 7/1, and 10/1
The trade-off: each extra year of fixed-rate certainty costs you teaser-rate margin. As of 2026, the typical spread is roughly 0.125-0.25pp from 5/1 → 7/1, and another 0.125-0.25pp from 7/1 → 10/1. The closer you get to the 30-year-fixed rate, the less the ARM teaser is buying you.
Pick 5/1if you're highly confident you'll sell or refinance inside 5 years. Job market is mobile, life is in flux, or you're explicitly buying with a planned exit. Maximize the teaser-discount payout.
Pick 7/1for most people who want some ARM savings but aren't sure about timing. Median US homeowner tenure is ~13 years, so 7/1 covers more of the bell curve where you actually still own the home. Sweet spot for "cautious ARM" buyers.
Pick 10/1when you specifically need 10 years of rate certainty (kids' school years, dual-income locked-in window) but refuse to take the full 30-year-fixed rate. By the time the spread to fixed narrows to under 0.5pp, the case for 10/1 over fixed gets weaker.
The 30-year-fixed wins by defaultwhen (1) the ARM spread is under ~0.75pp, (2) you can't absorb the lifetime-cap worst case shown in the calculator, (3) the home is your forever home and you have no plan to move/refinance. The teaser savings rarely justify the reset risk in those cases.
All three ARM types share the same caps structure in FRM-conforming form: 2pp initial cap, 2pp periodic, 5pp lifetime. The worst-case modeled in the calculator (initial rate + lifetime cap) is the same regardless of which fixed-period variant you pick — only thetime until reset changes.
Why we don't use SOFR forecasts:the Fed's rate path is genuinely uncertain. Yield-curve-implied forecasts have been wrong in every direction over the last 15 years. We instead let you specify a single expected reset rate — your forecast — and model that flat through the remainder of the term. The break-even reset rate tells you the threshold; you decide which side of it you'll land.
The calculator's ARM-type toggle lets you swap between 5/1, 7/1, and 10/1 in place to compare. Total interest at the same expected reset rate gets lower as the fixed period extends — more principal is paid down before the reset shock hits.