Adjustable Rate Mortgage (ARM)
"Lower rates now. Flexibility later."
Start with a lower rate than fixed loans. After your initial period (5, 7, or 10 years), the rate adjusts annually. Great for buyers who plan to move or refinance.
3-5%
Min Down
620+
Min Credit
$766K conforming
Max Loan
Is This Loan Right for You?
This Loan is Perfect If You...
- Plan to sell or move within 5-10 years
- Expect to refinance before adjustment
- Want the lowest initial rate possible
- Comfortable with some future uncertainty
- Understand rate cap protections
This Might NOT Be Right If...
- This is your forever home
- Need long-term payment certainty
- Risk-averse about payment changes
- Planning to stay 15+ years
Adjustable Rate Mortgage (ARM) Benefits
Everything you need to know about your benefits
Lower Initial Rate
Start 0.5-1% lower than comparable fixed-rate loans
Save Thousands
Lower rate = thousands saved during initial period
Rate Cap Protection
Built-in limits prevent extreme rate increases
Flexibility
Perfect for buyers with 5-10 year timeframes
Refinance Option
Can refinance to fixed rate before adjustment period
As Low as 3% Down
Same down payment options as fixed conventional
How It Works
Your path to homeownership in just a few simple steps
Choose Your ARM Type
Select 5/1, 7/1, or 10/1 based on your timeline
Lock Lower Rate
Secure an initial rate below comparable fixed loans
Enjoy Fixed Period
Your rate stays locked for 5, 7, or 10 years
Plan Your Exit
Sell, refinance, or continue with capped adjustments
Choose Your ARM Type
Select 5/1, 7/1, or 10/1 based on your timeline
Lock Lower Rate
Secure an initial rate below comparable fixed loans
Enjoy Fixed Period
Your rate stays locked for 5, 7, or 10 years
Plan Your Exit
Sell, refinance, or continue with capped adjustments
Types of Adjustable Rate Mortgage (ARM)
Choose the option that fits your situation
Fixed rate for 5 years, then adjusts annually. Lowest initial rate of all ARM options.
Fixed rate for 7 years, then adjusts annually. Popular middle-ground option.
Fixed rate for 10 years, then adjusts annually. Most stability of ARM options.
ARM vs Fixed: 5-Year Comparison
| Feature | 5/1 ARM(This loan) | 30-Year Fixed |
|---|---|---|
| Initial Interest Rate | ~5.75% | ~6.50% |
| Monthly Payment ($400K) | ~$2,334 | ~$2,528 |
| Monthly Savings | $194/month ✓ | — |
| 5-Year Savings | $11,640 ✓ | — |
| Rate After 5 Years | Adjusts (capped) | Same rate |
| Best For | Short-term ownership | Long-term ownership |
* Rates and terms subject to change. Contact us for current offers.
Frequently Asked Questions
Common questions about Adjustable Rate Mortgage (ARM)
Last updated:
How does an adjustable-rate mortgage work?
An ARM has two phases. First, a fixed-rate period (5, 7, or 10 years) where your rate doesn't change. After that, your rate adjusts annually based on a market index plus a margin. The trade-off for accepting future uncertainty is a lower initial rate than fixed loans.
What do the numbers in "5/1 ARM" mean?
The first number (5) is how many years your rate stays fixed. The second number (1) means the rate adjusts once per year after the fixed period ends. So a 7/1 ARM is fixed for 7 years, then adjusts annually.
How much can my rate increase?
ARMs have three caps: Initial cap (max first adjustment, typically 2%), Periodic cap (max yearly adjustment, typically 2%), and Lifetime cap (max total increase, typically 5-6%). If you start at 6%, your rate could never exceed 11-12%.
- Choose an ARM if you plan to sell, move, or refinance within your fixed period. Choose fixed if this is your forever home. ARMs make sense when you're confident you won't still have the same mortgage when adjustments begin.
- Absolutely. Many ARM borrowers refinance to a fixed-rate mortgage before their adjustment period begins. This gives you the benefit of lower initial payments while maintaining the option to lock in a fixed rate later.
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Lower Your Rate Today
See how much you could save with an ARM
Or call us directly: (757) 558-2603