# Am I calculating the future payment on my ARM correctly?

We currently have an ARM on our house, bought in April of 2020 with a starting rate of 1.99%. It is up for re-amortization in April 2025. Assuming that the rate adjust to the highest allowed in the contract (3%) our new interest rate will be 4.99%. Current balance is about \$145,000 and I'm assuming taxes/insurance stays the same. I am trying to figure out what our minimum payment towards principal is going to be at that time.

Using Excel FV function I can calculate the balance at April of 2025:

``````-FV(0.0199/12, 19, 430, -145000, 0) = -\$141,344
``````

Where 19 is the months until April 2025 and \$430 is what we currently pay towards principal.

Then I plug that balance into another FV function to find what payment I need to make for 25 years to pay off the loan. I'm assuming this is a rough estimate of what the bank will do when they also calculate the new payment at that time. This gives me:

``````-FV(0.0499/12, 25*12, X, -\$141,344, 0) = Y
``````

Messing with "X" until I get "Y" close to zero, I come up with a payment of \$826.

I'm aware that the bank will again re-amortize the loan after another 5 years which will change the payment again. However, am I calculating the future payment at least from April 2025 to April 2030 correctly?

• Using the PMT function of Excel would be better than trial-and-error on FV Sep 13, 2023 at 20:25

I believe that you are confusing a pair of numbers.

``````-FV(0.0199/12, 19, 430, -145000, 0) = -\$141,344