On a 5 year ARM, my understanding is you pay at the low rate for 5 years as if you were paying the mortgage over 30 years.

My question is, when the loan resets for year 6, are your payments recalculated based on the remaining balance of the mortgage? Does prepaying help lower your monthly payment when it resets?

So if I borrow $160K at 2.3%. If I pay additional each month and at year 5 I only owe $100K. When the rate resets will my new payment take into account that I prepaid a good chunk of the loan? Or will the payments still be based on the $160K?

thanks

My question is, when the loan resets for year 6, are your payments recalculated based on the remaining balance of the mortgage? Does prepaying help lower your monthly payment when it resets?

So if I borrow $160K at 2.3%. If I pay additional each month and at year 5 I only owe $100K. When the rate resets will my new payment take into account that I prepaid a good chunk of the loan? Or will the payments still be based on the $160K?

thanks

## Comment