Adjustable-Rate Mortgage
A popular choice for homebuyers seeking flexibility is an adjustable-rate mortgage (ARM). ARMs are ideal for those looking for a lower initial rate or a flexible way to finance their starter home. Whether you’re buying your first home or refinancing, an ARM provides both affordability and adaptability.
Our adjustable-rate mortgages come in a variety of term options—including 3/6, 5/6, 7/6, 10/6, and 15/6—allowing you to meet your short-term financial goals.
What Is an Adjustable-Rate Mortgage (ARM)?
An adjustable-rate mortgage (ARM) is a home loan with a variable interest rate. Unlike a fixed-rate mortgage, which stays the same for the life of the loan, an ARM’s interest rate adjusts at set intervals after an initial fixed period.
Benefits of an ARM:
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Lower starting interest rate
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Lower initial monthly payment
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Potential to afford a larger home
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Possible savings if market conditions are favorable
How Does an ARM Work?
An ARM starts with an “introductory” rate that is lower than typical mortgage rates for a set period, usually several years. After this period, the interest rate resets based on a designated “index,” causing your monthly payment to rise or fall.
ARM loans are often expressed as X/Y:
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X = number of years at the initial fixed rate
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Y = frequency of rate adjustments over the remaining loan term
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Eligibility for an ARM:
Many homebuyers qualify for an ARM, especially those with:
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Income sufficient to cover the maximum possible payment
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Expected steady income growth
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Low debt levels
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Plans for short-term home ownership
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Modern ARMs include protections such as adjustment caps and lifetime caps to limit how much rates can change, along with lender disclosures about maximum rates and payments.
To explore ARM options and receive a personalized loan scenario, contact us today.