Assume a 1/1 ARM without cap. Term =15 years. Initial loan balance =$10,000. The starting teaser rate =3%, margin =2%. - Periodic adjustment cap =2% - Lifetime cap rate =12% - Lifetime floor rate =3% What is the mortgage rate in Year 2? 5%13.50%3%7% Assume a 1/1 ARM without cap. Term =15 years. Initial loan balance =$10,000. The starting teaser rate =3%, margin =2%. - Periodic adjustment cap =2% - Lifetime cap rate =12% - Lifetime floor rate =3% What is the mortgage rate in Year 2? 5%13.50%3%7%