Lower Rates Up Front. Flexibility Built In.
Adjustable Rate Mortgages (ARMs) start with a fixed rate for a set period, then adjust periodically based on market conditions. They’re ideal for buyers who plan to sell or refinance before the first adjustment, or who want lower initial payments.
Highlights
Fixed-rate period typically lasts 3, 5, 7, or 10 years before adjustments begin
Interest rate adjusts based on a market index and lender margin
Rate caps limit how much the interest rate can increase at each adjustment
Best suited for borrowers who plan to sell, refinance, or pay off their mortgage within the fixed-rate period
Choose Your Path
FAQ
What does 5/6 ARM or 7/1 ARM mean?
The first number is the fixed-rate period; the second is how often the rate adjusts afterward. 6 represents every 6 months and 1 represents every year.
What are rate adjustment caps?
Limits on how much your rate can increase per adjustment and over the life of the loan.
What index is used to calculate adjustments?
Most ARMs are tied to SOFR, the Secured Overnight Financing Rate.
Do ARMs offer lower monthly payments up front?
Usually but not always. It's important to compare both a Fixed and Adjustable options to determine which is best given your goals.
Can I refinance an ARM later into a fixed rate?
Absolutely, many borrowers plan to refinance before the first adjustment period ends.
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Disclaimer: Information provided is for educational purposes only and is subject to change. All loan programs, interest rates, down payment requirements, and terms are subject to credit approval, underwriting guidelines, investor requirements, and may change without notice. Not all applicants will qualify. Restrictions may apply, including but not limited to geographic limitations, property type, and occupancy requirements.