ARM Margin Index Rate 2026 Comparison Calculator
Model an adjustable-rate mortgage using the 2026 SOFR, CMT, or Treasury index plus your lender's margin. See the fully indexed rate, payments at each adjustment, and the lifetime cap worst-case scenario.
| Starting payment (intro period) | — |
| Fully indexed rate = index + margin | — |
| Adjustment Schedule | |
| First adjustment (capped) | — |
| Second adjustment | — |
| Third adjustment | — |
| Lifetime cap reached at | — |
| Worst-case monthly payment | — |
An ARM rate has two parts: an index (a public benchmark like SOFR or the 1-Year Constant Maturity Treasury) and a margin (your lender's fixed markup, set at loan origination). After the intro period ends, your rate resets to index + margin, subject to caps. Last updated May 2026.
SOFR vs Treasury Indexes in 2026
Since the 2021 LIBOR phaseout, most new ARMs are tied to 30-Day Average SOFR (Secured Overnight Financing Rate), published by the NY Fed. Older loans still reference 1-Year CMT (Constant Maturity Treasury) or 5-Year CMT, published by the US Treasury. As of May 2026, 30-Day SOFR sits near 4.35% and 1-Year CMT near 4.45%. Margins on conforming ARMs are typically 2.25%-2.75%.
How Caps Limit Your Payment Shock
Caps are expressed as initial / periodic / lifetime (commonly 2/1/5 or 5/2/5). A 2/1/5 cap means: (1) the first adjustment can't move your rate more than 2 percentage points, (2) subsequent adjustments can't move it more than 1 point per period, and (3) the rate can never be more than 5 points above your starting rate over the loan's life. Worst-case math: a 6.25% start rate with 5/2/5 caps maxes at 11.25%, even if SOFR + margin would suggest 13%+.
Worst-Case Planning
The CFPB requires lenders to disclose the maximum possible payment in the Loan Estimate's Adjustable Interest Rate Table. Always confirm you can afford the lifetime-cap payment before signing. On a $400,000 30-year ARM at a 6.25% start, monthly P&I is ~$2,463. If the rate hits the 11.25% lifetime cap, the payment jumps to roughly $3,675 — a 49% increase. Stress-test that against your income before borrowing.
Common ARM Mistakes
(1) Comparing only start rate — always compare the fully indexed rate (index + margin) against today's 30-year fixed. (2) Ignoring the index trend — a 4.35% SOFR could rise to 6%+ in a tightening cycle. (3) Confusing initial and periodic caps — a 5/2/5 ARM can move 5 points at first reset, not 2. (4) Not budgeting for cap-max payment — required by CFPB disclosure but often ignored.
Sources: NY Fed SOFR, US Treasury Daily Yield Curve, CFPB ARM Disclosure Rules.