The Notices You Get Before Your Adjustable-Rate Mortgage Payment Changes

Published by the Modern Lending Solutions editorial team. Last reviewed: October 30, 2026.

Short answer: if you have an adjustable-rate mortgage (ARM) on your main home, the lender or servicer must send you a separate notice 210 to 240 days before the first payment at the first new rate is due, and another notice 60 to 120 days before the first payment of each rate change that changes your payment. The notices show your current and new rate and payment, how the rate is figured from the index and margin, any caps, and, in the first notice, options if you cannot afford the new payment. This page covers federal law only; other rules may apply where you live. It is general information, not legal or financial advice.

Which loans get these notices

Both notices apply to an ARM, which Regulation Z defines as a closed-end consumer credit transaction secured by your principal dwelling in which the annual percentage rate may increase after closing (12 CFR 1026.20(c)(1)(i) and (d)(1)(i), eCFR, text up to date as of October 28, 2026, read October 30, 2026). A home equity line of credit is open-end credit, so it is not covered by these two notices. The rule lists these exemptions:

Notice 1: before the first rate change

The first-reset notice must come as a separate document “at least 210, but no more than 240, days before the first payment at the adjusted level is due”. If that first new payment is due within the first 210 days after closing, it must be given at closing (1026.20(d)). It is required for the first rate change even if the payment ends up the same. The CFPB describes this as seven to eight months before the first payment at the new rate (CFPB, reviewed February 2, 2024, read October 30, 2026; this page may be out of date). Under 1026.20(d)(2), the notice must include:

• The date of the notice, above the table.
• A statement that the period of your current rate is ending and that the change may change your payment, the date the new rate takes effect and when later changes are scheduled, and any other changes on the same date, such as the end of an interest-only period.
• A table with the current and new rates, the current and new payments, and the date the first new payment is due. If the new rate is not known yet, an estimate labeled as such, based on the index within fifteen business days before the notice.
• The index or formula, a source of information about it, and the margin, with an explanation that the margin is a set number of percentage points added to the index.
• Any limits (caps) on rate or payment increases at each change and over the life of the loan, and any increase the lender gave up because of a cap, with the earliest date it may be applied later.
• How the new payment is figured: the index, the margin, the loan balance expected on the change date and the remaining term.
• If the new rate is an estimate, a statement that a second notice with the actual rate and payment will come two to four months before the first new payment is due.
• When a prepayment penalty may apply, and that you can contact the servicer for the maximum amount.
• A phone number to call if you expect you cannot make the new payments.
• Four alternatives explained in plain terms: refinancing, selling the home and paying the loan in full, a loan modification, and payment forbearance.
• Where to find a list of housing counselors, a phone number for one, and a CFPB web address for housing finance agency contacts.

Notice 2: before each payment change

When a rate change also changes your payment, the notice must come “at least 60, but no more than 120, days before the first payment at the adjusted level is due” (1026.20(c)(2)). Shorter timing applies in three cases: at least 25 but no more than 120 days for ARMs whose rate changes every 60 days or more frequently, and for certain loans originated before January 10, 2015 that use an index figure from less than 45 days before the change; and as soon as practicable but not less than 25 days before the first new payment when the first change comes within 60 days of closing and the rate given at closing was an estimate. The notice shows the current and new rate and payment, the date of the first new payment, the index, margin and caps, any increase given up because of a cap, the expected balance and remaining term, and when a prepayment penalty may apply (1026.20(c)(2)(i)-(vii)). The rule also covers a rate change when an ARM converts to a fixed rate, if the payment changes (1026.20(c)).

Example: the dates

This example is only for the math, with example dates. If the first payment at the first new rate is due Thursday, July 1, 2027:

If the next rate change makes the first new payment due Saturday, July 1, 2028, the payment-change notice window under the 60 to 120 day rule is:

Example: how the new rate and payment are figured

The CFPB explains that after the starting rate ends, the index and margin are added together to become your new rate, subject to any caps (CFPB, reviewed April 3, 2024), and that caps limit how much the rate can move at the first change, at each later change and over the life of the loan (CFPB, reviewed January 14, 2025). Your own index, margin and caps are in your loan documents and on the notice. This example is only for the math, with example figures, not rates for any loan: a $300,000.00 loan over 30 years, a starting rate of 6.00% fixed for 60 payments, a margin of 2.75% and a first-change cap of 2.00%. Balances are rounded to the cent each month.

In the second column the cap holds the rate at 8.00%, so 0.75% of increase is given up. The notice must say whether such an increase may be applied at a later change and the earliest date it could apply (1026.20(c)(2)(iv), (d)(2)(v)). These payments are principal and interest only; taxes and insurance in an escrow account come on top. For a loan covered by the ability-to-repay rule, the lender had to weigh a payment at the higher fully indexed rate when it decided whether you could repay; see the ability-to-repay rule.

What to do when a notice arrives

The CFPB suggests budgeting for the new payment, shopping for a better loan, and getting help from a housing counseling agency to look at your options (CFPB). You can find one through the CFPB housing counselor search. Check the notice against your loan documents: the index, the margin, the caps and the change dates should match. If you refinance, your new lender must give you a Closing Disclosure at least three business days before closing; see reviewing your Closing Disclosure. If you think the servicer got the rate or payment wrong, see sending a notice of error to your servicer. To complain, use consumerfinance.gov/complaint. For your own case, ask a lawyer; you can look for legal aid through the Legal Services Corporation.

Questions to ask the servicer

• Is the new rate on the notice an estimate, and when will I get the actual rate and payment?
• Which index value and date did you use, and where can I check it?
• Was any increase given up because of a cap, and can it be added at a later change?
• When is the next scheduled change, and what is the highest rate my caps allow?
• Is there a prepayment penalty if I refinance or sell, and what is the maximum amount?
• What options do you offer if I cannot make the new payment?

Checklist

• First-reset notice: 210 to 240 days before the first new payment (1026.20(d)).
• Payment-change notice: 60 to 120 days before each new payment, with shorter timing in a few cases (1026.20(c)).
• New rate = index + margin, within the caps.
• Check the index, margin, caps, balance and dates against your loan documents.
• Look at your options early: budget, refinance, sell, modification, forbearance, a housing counselor.

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Sources

1. eCFR: 12 CFR 1026.20, Disclosure requirements regarding post-consummation events (Regulation Z), current text up to date as of October 28, 2026
2. CFPB: I received notice of an upcoming rate change on my adjustable-rate mortgage (ARM). Why did I receive this and what should I do now? (reviewed February 2, 2024)
3. CFPB: For an adjustable-rate mortgage (ARM), what are the index and margin, and how do they work? (reviewed April 3, 2024)
4. CFPB: What are rate caps with an adjustable-rate mortgage (ARM), and how do they work? (reviewed January 14, 2025)
5. CFPB: Find a housing counselor
6. CFPB: Submit a complaint
7. Legal Services Corporation: Find legal aid

Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.