question about how ARMs are calculated

[nereo]

I'm almost embarassed to ask this question, but I need to double-check my assumptions.

I have a mortgage here in Canada that's pretty typical; it's a 25 year note with a 4 year term.  For those of you in USA, think of it as an ARM that 'adjusts' once every 4 years.  My term will reset later this year and I'm trying to calculate what my new payment might be.

Question:
Will my new monthly payment be based on the remaining balance of my mortgage (effectively keeping the length the same)? 
I'm assuming it is, otherwise the length of my note would change. 

The only thing that makes me question this is that even if interest rates go UP, my monthly payment may still go DOWN because there's less principle remaining.

[plainjane]

When you renew your mortgage, they are going to ask you what you want the amortization to be.

If the interest rate is the same, your payment will be the same if you renew with a 21 year amortization (the original 25 year term minus the 4 years already done).  If you renew and set your amortization to 15 years, then your payments will go up (again assuming the rates don't change).  Both of these assume that you haven't made any additional lump sum payments.

Our original mortgage was 5 years fixed & 25 years amortization.  Our second was 5 years variable with 10 years amortization.  We'd prepaid some, and the rates had dropped, so our payments actually dropped in the second term.

[nereo]

thanks, that clears it up.