7-Year ARM vs 10-Year ARM: Which One Wins? Calculator

What does $2.62 a month mean?

It means that, on the defaults, the 10/1 ARM costs $2.62 a month less than the 7/1 ARM: $2,499.41 a month against $2,502.02. The 7/1 payment is $2,502.02 a month — a $400,000 loan at 6.40% over 30 years — and the 10/1 payment is $2,499.41 a month — the same $400,000 at 6.39% over 30 years. That is the surprise of this comparison: the loan with the longer fixed period is the cheaper one, by a hair, because its rate is 1 basis point lower. Over the first 84 months the monthly saving adds up to only $219.95, and the balances after 84 months are nearly identical — $361,058.25 against $360,997.17. But the monthly saving is only the beginning: the 10/1 also locks its rate for three more years. At month 85 the 7/1 adjusts, and at the 7.00% scenario rate its payment becomes $2,635.43 a month, while the 10/1 is still paying $2,499.41. Add the payments and the balance together and the 7-year total cost is $571,228.23 for the 7/1 against $570,947.20 for the 10/1: the 10/1 wins by $281.03. The total cost — payments plus what you still owe — is the fair comparison, because a cheaper payment that leaves a bigger balance is not really cheaper.

Three things to check before you trust the number

The adjusted rate is a scenario, not a forecast. The 7.00% on the defaults is a what-if: at 7.00% the 7/1 payment becomes $2,635.43 a month from month 85 and the 10/1's becomes $2,621.78 a month from month 121; at 8.00% they are $2,864.83 and $2,828.54. The real adjustment is the index — SOFR for most new ARMs — plus the lender's margin, typically 2.5–3.0%, and nobody knows what SOFR will be in seven or ten years. The calculator also does not model rate caps: a typical ARM caps the first adjustment at 2 points and later ones at 1 point a year, with a lifetime cap around 5 points, so neither rate can jump straight to 11.40% in one step — the worst case takes several adjustments. Change the adjusted rate to the worst case your caps allow and see whether the verdict still holds.

The 7/1 only wins if its rate is meaningfully lower. At today's rates the 10/1 wins outright, so the question is not which ARM is better — it is how much cheaper the 7/1 would have to be. The answer is 6.38% to win at 7 years and 6.16% to win at 10 years. If a lender quotes you a 7/1 at 6.13% — the kind of discount a shorter fixed period usually carries — the 7/1 wins by $7,298.12 at 7 years and never gives the lead back. Compare the two quotes side by side; the fixed period alone tells you nothing.

A falling-rate world flips the verdict. If both loans adjust to 6.00% instead of 7.00%, the 7/1 wins the 10-year total cost by $3,907.29 — because it gets the low rate three years earlier, in years 7 to 10, while the 10/1 is still paying 6.39%. The largest adjusted rate at which the 7/1 still wins the 15-year total cost is 6.36%. The 10/1 is the safer loan when rates rise; the 7/1 is the better loan when rates fall. Which world you believe in is the decision.

Worked example

On the defaults: $400,000 loan, 30 years, 7/1 ARM at 6.40% against a 10/1 ARM at 6.39%, both adjusting to 7.00%.

1. 7/1 payment: $400,000 at 6.40% over 30 years is $2,502.02 a month.
2. 10/1 payment: $400,000 at 6.39% over 30 years is $2,499.41 a month.
3. The monthly saving: $2,502.02 − $2,499.41 is $2.62 a month, to the 10/1.
4. The balances at month 84: the 7/1 balance is $361,058.25 and the 10/1 balance is $360,997.17.
5. The 7-year total cost: 84 payments of $2,502.02 plus the balance is $571,228.23 for the 7/1; 84 payments of $2,499.41 plus the balance is $570,947.20 for the 10/1.
6. The lead: $571,228.23 − $570,947.20 is $281.03 — the 10/1 wins.
7. The adjustment: at 7.00% the 7/1 payment on the $361,058.25 balance over 23 years is $2,635.43 a month from month 85 — while the 10/1 is still at $2,499.41.
8. The 10-year total cost: the 7/1 is $644,970.42 and the 10/1 is $638,092.20 — the 10/1 leads by $6,878.22.

And the other way: at a 7/1 rate of 6.38% the 7/1 wins the 7-year total cost by $281.01, and at 6.16% it wins the 10-year total cost by $163.25 — the two numbers that say how much cheaper the 7/1 has to be. And the adjusted rate that makes the 7/1's adjusted payment exactly equal the 10/1's payment is 6.388%: at 6.388% the adjusted payment is $2,499.39, within $0.02 of the 10/1's $2,499.41.

Every branch, checked

• Both adjust to 8.00%: Both adjust to 8.00%: 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years. Both adjust to 8.00% — the 7/1 payment becomes $2,864.83 a month from month 85 and the 10/1's becomes $2,828.54 a month from month 121. The 10/1's lead grows to $17,713.77 at 10 years and $19,349.96 at 15 years: a higher adjustment punishes the loan that adjusts first.
• Both adjust to 6.00%: Both adjust to 6.00%: 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years. Both adjust to 6.00% — the 7/1 payment becomes $2,414.93 a month and the 10/1's $2,422.71 a month. Now the 7/1 WINS: it gets the low rate three years earlier, so it wins the 10-year total cost by $3,907.29 and the 15-year total cost by $4,210.15. A falling-rate world is the 7/1's world.
• Both adjust to 6.39% (flat): Both adjust to 6.39% (flat): 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years. Both adjust to 6.39%, the same as the 10/1's initial rate — the 7/1 payment becomes $2,499.83 a month, barely below its initial $2,502.02. The 10/1 still wins, by $292.39 at 10 years: it paid 6.39% while the 7/1 paid 6.40% for seven years, and that 1 basis point is the whole gap.
• 5-year horizon: 5-year horizon: 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $200.79 at 5 years. 5-year horizon — the 10/1 wins by $200.79 at 5 years. Neither loan has adjusted yet, so this is just the payment gap: $2.62 a month for 60 months, plus the balance difference.
• 10-year horizon: 10-year horizon: 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $6,878.22 at 10 years. 10-year horizon — the 10/1 wins by $6,878.22 at 10 years. The 7/1 has had three years at the 7.00% adjusted rate ($2,635.43 a month) while the 10/1 is still at 6.39% — that is where the lead comes from.
• 15-year horizon: 15-year horizon: 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $7,455.46 at 15 years. 15-year horizon — the 10/1 wins by $7,455.46 at 15 years. Both loans have adjusted to 7.00% by now, so the lead barely grows past the 10-year figure: the damage was done in years 7 to 10.
• Loan $300,000: Loan $300,000: 7/1 ARM $1,876.52/mo at 6.40%, 10/1 ARM $1,874.55/mo at 6.39%: the 10/1 saves $1.96/mo, 10/1 ARM wins by $210.77 at 7 years. Loan $300,000 — the 7/1 payment is $1,876.52 a month and the 10/1 is $1,874.55, a saving of $1.96 a month. At 10 years the 10/1 wins by $5,158.66; at 15 years by $5,591.59.
• Loan $500,000: Loan $500,000: 7/1 ARM $3,127.53/mo at 6.40%, 10/1 ARM $3,124.26/mo at 6.39%: the 10/1 saves $3.27/mo, 10/1 ARM wins by $351.29 at 7 years. Loan $500,000 — the 7/1 payment is $3,127.53 a month and the 10/1 is $3,124.26, a saving of $3.27 a month. At 10 years the 10/1 wins by $8,597.77; at 15 years by $9,319.32.
• 7/1 ARM rate 6.13%: 7/1 ARM rate 6.13%: 7/1 ARM $2,431.74/mo at 6.13%, 10/1 ARM $2,499.41/mo at 6.39%: the 7/1 saves $67.67/mo, 7/1 ARM wins by $7,298.12 at 7 years. 7/1 ARM rate 6.13% — the 7/1 payment is $2,431.74 a month, a saving of $67.67 a month over the 10/1. The 7/1 wins by $7,298.12 at 7 years, by $1,043.03 at 10 years and by $982.62 at 15 years — and it never gives the lead back. This is the rate a 7/1 needs to be worth taking.
• Worst case: both adjust to 11.40% (lifetime cap): Worst case: both adjust to 11.40% (lifetime cap): 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years. Worst case: both adjust to 11.40%, the lifetime cap — the 7/1 payment becomes $3,702.41 a month from month 85 and the 10/1's $3,583.00 a month from month 121. The 10/1 leads by $54,797.76 at 10 years and $60,969.95 at 15 years. The three extra fixed years are worth a fortune when rates jump.

The reverses, worked backwards

• 7/1 ARM rate at which the 7/1 wins the 7-year total cost: 6.38 — at 6.38 the figures are 7/1 ARM $2,496.79/mo at 6.38%, 10/1 ARM $2,499.41/mo at 6.39%: the 7/1 saves $2.62/mo, 7/1 ARM wins by $281.01 at 7 years; 7-year total cost: 7/1 $570,666.20 vs 10/1 $570,947.20 (7/1 leads by $281.01); 10-year lead: 10/1 leads by $6,291.22; 15-year lead: 10/1 leads by $6,830.74; 7/1 adjusted payment $2,634.54; break-even month 86; at the lower neighbor the figures are 7/1 ARM $2,494.17/mo at 6.37%, 10/1 ARM $2,499.41/mo at 6.39%: the 7/1 saves $5.23/mo, 7/1 ARM wins by $561.99 at 7 years; 7-year total cost: 7/1 $570,385.21 vs 10/1 $570,947.20 (7/1 leads by $561.99); 10-year lead: 10/1 leads by $5,997.73; 15-year lead: 10/1 leads by $6,518.37; 7/1 adjusted payment $2,634.09; break-even month 88; at the upper neighbor the figures are 7/1 ARM $2,499.41/mo at 6.39%, 10/1 ARM $2,499.41/mo at 6.39%: a tie on total cost at 7 years; 7-year total cost: 7/1 $570,947.20 vs 10/1 $570,947.20 (tie); 10-year lead: 10/1 leads by $6,584.71; 15-year lead: 10/1 leads by $7,143.11; 7/1 adjusted payment $2,634.99; break-even month 1 (10/1 leads from the first payment) — verdict: STEP.
• 7/1 ARM rate at which the 7/1 wins the 10-year total cost: 6.16 — at 6.16 the figures are 7/1 ARM $2,439.50/mo at 6.16%, 10/1 ARM $2,499.41/mo at 6.39%: the 7/1 saves $59.90/mo, 7/1 ARM wins by $6,456.90 at 7 years; 7-year total cost: 7/1 $564,490.30 vs 10/1 $570,947.20 (7/1 leads by $6,456.90); 10-year lead: 7/1 leads by $163.25; 15-year lead: 7/1 leads by $44.59; 7/1 adjusted payment $2,624.59; break-even month 206; at the lower neighbor the figures are 7/1 ARM $2,436.91/mo at 6.15%, 10/1 ARM $2,499.41/mo at 6.39%: the 7/1 saves $62.49/mo, 7/1 ARM wins by $6,737.33 at 7 years; 7-year total cost: 7/1 $564,209.87 vs 10/1 $570,947.20 (7/1 leads by $6,737.33); 10-year lead: 7/1 leads by $456.52; 15-year lead: 7/1 leads by $357.26; 7/1 adjusted payment $2,624.13; break-even never within 30 years; at the upper neighbor the figures are 7/1 ARM $2,442.09/mo at 6.17%, 10/1 ARM $2,499.41/mo at 6.39%: the 7/1 saves $57.31/mo, 7/1 ARM wins by $6,176.44 at 7 years; 7-year total cost: 7/1 $564,770.76 vs 10/1 $570,947.20 (7/1 leads by $6,176.44); 10-year lead: 10/1 leads by $130.03; 15-year lead: 10/1 leads by $268.06; 7/1 adjusted payment $2,625.04; break-even month 120 — verdict: STEP.
• Largest adjusted rate at which the 7/1 wins the 15-year total cost: 6.36 — at 6.36 the figures are 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years; 7-year total cost: 7/1 $571,228.23 vs 10/1 $570,947.20 (10/1 leads by $281.03); 10-year lead: 7/1 leads by $30.98; 15-year lead: 7/1 leads by $39.64; 7/1 adjusted payment $2,493.25; break-even month 1 (10/1 leads from the first payment); at the lower neighbor the figures are 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years; 7-year total cost: 7/1 $571,228.23 vs 10/1 $570,947.20 (10/1 leads by $281.03); 10-year lead: 7/1 leads by $138.76; 15-year lead: 7/1 leads by $155.95; 7/1 adjusted payment $2,491.05; break-even month 1 (10/1 leads from the first payment); at the upper neighbor the figures are 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years; 7-year total cost: 7/1 $571,228.23 vs 10/1 $570,947.20 (10/1 leads by $281.03); 10-year lead: 10/1 leads by $76.81; 15-year lead: 10/1 leads by $76.69; 7/1 adjusted payment $2,495.44; break-even month 1 (10/1 leads from the first payment) — verdict: STEP.
• Loan amount at which the 10/1 ARM leads by $10,000 at 10 years: $582,000 — at $582,000 the figures are 7/1 ARM $3,640.44/mo at 6.40%, 10/1 ARM $3,636.63/mo at 6.39%: the 10/1 saves $3.81/mo, 10/1 ARM wins by $408.90 at 7 years; 7-year total cost: 7/1 $831,137.08 vs 10/1 $830,728.18 (10/1 leads by $408.90); 10-year lead: 10/1 leads by $10,007.81; 15-year lead: 10/1 leads by $10,847.69; 7/1 adjusted payment $3,834.56; break-even month 1 (10/1 leads from the first payment); at the lower neighbor the figures are 7/1 ARM $3,634.19/mo at 6.40%, 10/1 ARM $3,630.39/mo at 6.39%: the 10/1 saves $3.80/mo, 10/1 ARM wins by $408.20 at 7 years; 7-year total cost: 7/1 $829,709.01 vs 10/1 $829,300.81 (10/1 leads by $408.20); 10-year lead: 10/1 leads by $9,990.61; 15-year lead: 10/1 leads by $10,829.05; 7/1 adjusted payment $3,827.97; break-even month 1 (10/1 leads from the first payment); at the upper neighbor the figures are 7/1 ARM $3,646.70/mo at 6.40%, 10/1 ARM $3,642.88/mo at 6.39%: the 10/1 saves $3.82/mo, 10/1 ARM wins by $409.60 at 7 years; 7-year total cost: 7/1 $832,565.15 vs 10/1 $832,155.55 (10/1 leads by $409.60); 10-year lead: 10/1 leads by $10,025.00; 15-year lead: 10/1 leads by $10,866.33; 7/1 adjusted payment $3,841.14; break-even month 1 (10/1 leads from the first payment) — verdict: STEP.
• Loan amount at which the 10/1 ARM leads by $500 at 7 years: $712,000 — at $712,000 the figures are 7/1 ARM $4,453.60/mo at 6.40%, 10/1 ARM $4,448.94/mo at 6.39%: the 10/1 saves $4.66/mo, 10/1 ARM wins by $500.23 at 7 years; 7-year total cost: 7/1 $1,016,786.25 vs 10/1 $1,016,286.02 (10/1 leads by $500.23); 10-year lead: 10/1 leads by $12,243.23; 15-year lead: 10/1 leads by $13,270.72; 7/1 adjusted payment $4,691.07; break-even month 1 (10/1 leads from the first payment); at the lower neighbor the figures are 7/1 ARM $4,447.35/mo at 6.40%, 10/1 ARM $4,442.69/mo at 6.39%: the 10/1 saves $4.65/mo, 10/1 ARM wins by $499.53 at 7 years; 7-year total cost: 7/1 $1,015,358.18 vs 10/1 $1,014,858.65 (10/1 leads by $499.53); 10-year lead: 10/1 leads by $12,226.03; 15-year lead: 10/1 leads by $13,252.08; 7/1 adjusted payment $4,684.48; break-even month 1 (10/1 leads from the first payment); at the upper neighbor the figures are 7/1 ARM $4,459.86/mo at 6.40%, 10/1 ARM $4,455.19/mo at 6.39%: the 10/1 saves $4.67/mo, 10/1 ARM wins by $500.94 at 7 years; 7-year total cost: 7/1 $1,018,214.32 vs 10/1 $1,017,713.39 (10/1 leads by $500.94); 10-year lead: 10/1 leads by $12,260.42; 15-year lead: 10/1 leads by $13,289.35; 7/1 adjusted payment $4,697.66; break-even month 1 (10/1 leads from the first payment) — verdict: STEP.
• Adjusted rate at which the 7/1 adjusted payment equals the 10/1 payment: 6.388 — at 6.388 the figures are 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years; 7-year total cost: 7/1 $571,228.23 vs 10/1 $570,947.20 (10/1 leads by $281.03); 10-year lead: 10/1 leads by $270.83; 15-year lead: 10/1 leads by $286.15; 7/1 adjusted payment $2,499.39; break-even month 1 (10/1 leads from the first payment); at the lower neighbor the figures are 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years; 7-year total cost: 7/1 $571,228.23 vs 10/1 $570,947.20 (10/1 leads by $281.03); 10-year lead: 10/1 leads by $260.05; 15-year lead: 10/1 leads by $274.51; 7/1 adjusted payment $2,499.17; break-even month 1 (10/1 leads from the first payment); at the upper neighbor the figures are 7/1 ARM $2,502.02/mo at 6.40%, 10/1 ARM $2,499.41/mo at 6.39%: the 10/1 saves $2.62/mo, 10/1 ARM wins by $281.03 at 7 years; 7-year total cost: 7/1 $571,228.23 vs 10/1 $570,947.20 (10/1 leads by $281.03); 10-year lead: 10/1 leads by $281.61; 15-year lead: 10/1 leads by $297.79; 7/1 adjusted payment $2,499.61; break-even month 1 (10/1 leads from the first payment) — verdict: STEP.

What the defaults assume

The defaults are a $400,000 loan over 30 years, a 7/1 ARM at 6.40% for the first 7 years against a 10/1 ARM at 6.39% for the first 10 years — the Bankrate national average table for October 28, 2026, 6:30 AM — both adjusting to 7.00% at the end of their fixed periods, compared over 7 years. They are a starting point, not a quote: the model counts principal and interest only. Property tax, homeowners insurance, mortgage insurance, closing costs and refinancing costs are not in it — and an ARM refinance to escape a bad adjustment costs thousands in closing costs, which no monthly figure captures. The adjusted rate is a single scenario, the same for both loans: real ARMs adjust to SOFR plus a margin of typically 2.5–3.0%, move in steps limited by caps (typically 2 points at the first adjustment, 1 point a year after, 5 points over the life of the loan), and can adjust more than once. The model assumes the adjusted rate stays flat after each loan adjusts and that you make every payment on time. Change the adjusted rate to your caps' worst case before you trust the verdict.

These notes repeat in every explainer section because this page is built to be read start to finish: the adjusted rate is a scenario, not a forecast; the 7/1 only wins if its rate is meaningfully lower; and a falling-rate world flips the verdict.

Output · formula · meaning

Who uses this

• A buyer choosing between two ARMs — the 10/1 saves $2.62 a month and wins by $281.03 at 7 years, but the answer turns on the adjusted rate and how long you stay.
• Someone who plans to move in seven years — if you sell or refinance before month 85, neither adjustment happens, and the 10/1's $2.62-a-month edge is the whole story.
• A borrower stress-testing the adjustment — at 8.00% the 10/1 leads by $17,713.77 at 10 years, and at the 11.40% lifetime cap it leads by $54,797.76: the two numbers that bound the risk.
• Anyone comparing loan sizes — at $300,000 the 10/1 saves $1.96 a month, and at $500,000 it saves $3.27: the saving scales with the loan, and at $712,000 the 7-year lead reaches $500.

Accuracy & limitations

Figures are the model's own totals on the numbers you type, computed to the cent from unrounded values: the payments come from the amortization factor, the balances from the amortization formula, and the total cost is the payments made plus the remaining balance — the displayed monthly saving is rounded, so the 7-year lead is the exact monthly difference accumulated, not the rounded figure times 84. The real-world anchors are Bankrate's ARM rates page (bankrate.com/mortgages/7-1-arm-rates/), which put the 7/1 ARM at 6.40% and the 10/1 ARM at 6.39% on October 28, 2026 at 6:30 AM — the same table that put the 5/1 ARM at 6.27% and the 30-year fixed at 7.31%. Rates move daily: check the current rate before you decide, and remember the rate you lock is the one in your loan estimate, not the one in a survey. The adjusted rate is a scenario, not a forecast: the real adjustment is SOFR plus a margin of typically 2.5–3.0%, limited by caps (typically 2 points at the first adjustment, 1 point a year after, 5 points lifetime), and the model holds the adjusted rate flat after each loan adjusts instead of moving it at each annual adjustment. The model leaves out property tax, homeowners insurance, mortgage insurance, closing costs, refinancing costs, and the value of certainty — a longer fixed period never changes, and that certainty is worth something the numbers cannot price. This page is a comparison tool, not mortgage advice: talk to a licensed loan officer before you choose.

Cite this calculator

The 10/1 ARM saves $2.62 a month — 7/1 ARM $2,502.02 a month at 6.40% against 10/1 ARM $2,499.41 a month at 6.39% — and it leads from the first payment. Balances after 84 months: 7/1 $361,058.25 vs 10/1 $360,997.17. 7-year total cost: 7/1 $571,228.23 vs 10/1 $570,947.20 — the 10/1 wins by $281.03; 10-year total cost: 7/1 $644,970.42 vs 10/1 $638,092.20 — the 10/1 wins by $6,878.22. Adjusted to 7.00% the 7/1 payment is $2,635.43 and the 10/1's is $2,621.78; adjusted to 8.00% they are $2,864.83 and $2,828.54. The adjusted rate that exactly equals the 10/1 payment is 6.388%. Rates: 7/1 ARM 6.40% and 10/1 ARM 6.39% (Bankrate national average table, October 28, 2026). 7/1 ARM rate at which the 7/1 wins the 7-year total cost: 6.38. 7/1 ARM rate at which the 7/1 wins the 10-year total cost: 6.16. Largest adjusted rate at which the 7/1 wins the 15-year total cost: 6.36. Loan amount at which the 10/1 ARM leads by $10,000 at 10 years: $582,000. Loan amount at which the 10/1 ARM leads by $500 at 7 years: $712,000. Adjusted rate at which the 7/1 adjusted payment equals the 10/1 payment: 6.388. Source: Bright Side Kit, brightoolbox.com.

Frequently asked questions