We are doing a consumer loan to purchase a secondary residence. It will be a variable rate loan on a 25/5 amortization. The payment stream indicates a set payment for 59 months with a balloon due of the final payment at maturity. The TIL is calling for an "example of effect of interest rate increase". How do we calculate this?

What about your ARM disclosure? You should not be dealing with this in the FED box as you should just be referring back to your early disclosure.

We have a similar Home Equity product that has a fixed rate for the first five years, maturity date is 10 yrs. We show the max. possible rate of increase on the 6th year to show the effect of interest rate increase.

We did give out our ARM disclosures, but our LaserPro program also inserted this wording on the TIL under the "variable rate feature" disclosure. Is this an issue with our system or is it a required disclosure?

You might have a parameter on this loan set wrong - it's been a long time since I dealt directly with LaserPro. The FED box shouldn't need an actual example on an ARM loan.

You may want to make sure you set the loan to ARM and not variable or both. I have run into that before and it was that. It could also be how you are structuring the rate changes. I would try ARM vs Variable first. good luck.

Our rate change structure is set up to change the first of the month following the last rate increase. Would this matter that our rate changes can increase on a monthly basis?

No - call LaserPro.