Clocker wrote:

- quote -

The only way to be sure is to check the loan documents, or ask your
lender. I strongly suspect your rate will continue to adjust over the
years (hence the term "ARM"), meaning your payment will likewise vary,
regardless of what additional principal you do or do not pay now. The
loan is "re-amortized" every time your rate changes.

So if you do pay down the principal now, it should only be because you
have no better use for your money and the associated borrowing cost.

For a traditional pure fixed-rate loan, paying down the principal
typically does not change your fixed monthly payment, it merely speeds
up the payoff date.

-Mark Bole

I'm in 3.75% 3-year ARM. It's due to adjust up in May a max of 2%.
Whatever the adjustment is, the payment won't be a problem. I'm just
curious, is the new payment based on the remaining balance of the loan
or the original balance?

Let's say the original loan was $100,000 and my balance at the time of
adjustment is $85,000. Will the new payment at the time of adjustment
be based on 27 years (30-3), plus the new interest rate (5.75%) and the
NEW principal ($85,000)? If so, I would not mind paying down the
principal a little before the rate adjustment and re-amortization.

Thanks,
Kevin