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Adjustable-Rate Mortgages (ARM)

Take advantage of a lower rate and payment at the start of your loan term.

Why Choose a Power Financial Credit Union Adjustable-Rate Mortgage

Lower Initial Rate and Payment

ARMs are a good bet if market rates will likely drop in the future, your income may rise, or you may move again soon.

Wide Range of ARM Terms

Choose if you want your rate and payment to stay fixed for the first 3, 5, 7, or 10 years* of your loan before it starts adjusting.

Competitive Interest Rates

We'll help you secure the best possible APR so you can afford to buy the house you want sooner than you think.

Quick and Easy Approval

We've streamlined our loan process so you'll get a fast answer without hassle or stress, plus we'll pay eligible closing costs up to 2% of  the loan amount.**

Adjustable-Rate Mortgage (ARM) Key Details

An adjustable-rate mortgage may seem a little complicated. But once you know the basics, you'll find an ARM can help you buy a home – now rather than later.

With an ARM, you get a lower interest rate and monthly payment for the first few years. After that, the rate gets adjusted periodically, and your payment may go up – or down.

  • Choice of loans that offer lower rates for 3, 5, 7 or 10* years before adjusting every six months
  • Our 5/5 ARM features a fixed rate for five years and then adjusts every five years
  • In most cases, the full loan is repaid over a 30-year period
  • There's a limit on how much the rate can increase per year over the life of the loan
  • ARMs available for purchase or refinance
  • Intangible tax fee waived for Power Financial Credit Union members
  • No prepayment penalty
  • Smooth and quick approval process
  • Secure and convenient payment options
  • Get a Lender Credit of up to 2% of the loan amount to cover eligible closing costs**
The fixed interest rate you get at the start of your ARM is usually lower than what you would get with a comparable fixed-rate home loan.

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Adjustable-Rate Mortgage Rates

Term Rate APR Points
3 yr./6 mo. ARM1 6.250% 6.329% 0.000
3 yr./6 mo. ARM1 _ No closing costs up to 2% of amount financed* 6.500% 6.502% 0.000
5 yr./6 mo. ARM1 6.375% 6.455% 0.000
5 yr./6 mo. ARM1 _ No closing costs up to 2% of amount financed* 6.625% 6.627% 0.000
5 yr./5 yr. ARM2 6.500% 6.581% 0.000
5 yr./5 yr. ARM_ No closing costs up to 2% of amount financed* 6.750% 6.752% 0.000
7 yr./6 mo. ARM1 6.500% 6.581% 0.000
7 yr./6 mo. ARM1 _ No closing costs up to 2% of amount financed* 6.750% 6.752% 0.000
10 yr./6 mo. ARM1 6.750% 6.832% 0.000
10 yr./6 mo. ARM1 _ No closing costs up to 2% of amount financed* 7.000% 7.002% 0.000
If you're looking to purchase a higher-value home, you can click below to see all our Mortgage Rates, including our options for Jumbo Adjustable-Rate Mortgages.
 

Calculate Your Monthly ARM Payments

With an adjustable-rate mortgage, you can use a mortgage calculator to see what your monthly payment is likely to be during the initial, fixed period of your loan and what it could be after your rate starts adjusting. Keep in mind that your rate and payment may go up or down when your rate adjusts. Hopefully, it will go down!

Still not sure if an ARM is right for you? Start by comparing an ARM vs fixed-rate mortgage. Then click below to estimate your monthly ARM payments before and after your rate adjusts.

 


Applying for an Adjustable-Rate Mortgage is Easy

Step 1

Apply Online

Use our secure online form to provide your details and ideal home purchase price.
Step 2

Pre-Approval

If approved, we'll discuss your ARM options and offer you a loan amount and rate so you can estimate your payments.
Step 3

Find a Home!

With your financing secure, Realtors and sellers will know you mean business, and you can put in a strong offer.

"Excellent client services as well as a great staff, always professional and smiles all around!!"

– Jose T.

FAQs About Adjustable-Rate Mortgages (ARM)

Accordion Section

ARM interest rates are fixed for the initial period of your loan, then the rate starts adjusting on a schedule. The initial interest rate you get with an ARM is usually lower than what you would get with fixed-rate loans. Here's what you need to know:
 
  • You can choose the length of your initial fixed rate period. For example, Power Financial Credit Unions offers a fixed period of 3, 5, 7, or 10 years.
  • Your monthly mortgage payment will also be fixed in that period, apart from any changes to your property taxes or insurance.
  • Once your fixed period ends, your interest rate adjusts on a schedule (based on a market index). For example, every five years or every six months.
  • When your rate starts adjusting, it may go up or down – and your payment may also go up or down.
  • There are caps on how much your rate can go up at the first adjustment, at each adjustment after that, and in total over the life of your loan.

ARMs that have fixed rates for a certain period and then the rates adjust are also known as Hybrid ARMs.

The most obvious reason to choose an ARM is that you can usually secure a loan with an interest rate that's lower than a standard fixed-rate home loan. Here are more situations when ARMs can work in your favor:
 
  • You want the lowest possible rate now because market rates are high.
  • You think market rates will come down in the future, so you'll automatically get a lower rate and payment without the need for a costly mortgage refinance.
  • You think your family income will rise in the future, so you will be able to comfortably afford any potential increases in your rate or payment.
  • You plan to sell your home in the short term before your rate starts adjusting or soon after.
Power Financial Credit Union offers flexibility when it comes to your preferred fixed period for your ARM loan and how often you want your rate to adjust once the fixed period is finished.

You may choose:

 
  • 5/5 ARM offers a fixed rate for 5 years, then adjusts every 5 years – this is a very popular option
  • 3/6 is fixed for 3 years, then adjusts every 6 months
  • 5/6 is fixed for 5 years, then adjusts every 6 months
  • 7/6 is fixed for 7 years, then adjusts every 6 months
  • 10/6 is fixed for 10 years, then adjusts every 6 months

ARMs generally have a total loan term of 30 years.

Down payments start at 3%, which means you may borrow up to 97% of the appraised value of your home.
You will likely need to pay PMI if your down payment is under 20%. You can stop paying PMI once you achieve 20% equity by paying down your mortgage and/or your home gaining value.
Yes, you do need to pay closing costs on an adjustable-rate mortgage. The good news is that we will pay your closing costs up to 2% of your loan amount.**

Plus, you may be able to roll some or all of your remaining costs into your loan principal if you don't want to pay upfront.
Yes, to be eligible for our adjustable-rate mortgage loans, you need to meet membership criteria for joining the credit union. It takes just a few minutes to join, and then you can access a home loan and all our other quality products and services.

Our membership consists of those who live, work or go to school in Broward, Charlotte, Collier, Lee, Martin, Miami-Dade, Monroe, Palm Beach County, Hillsborough, Manatee, Pinellas, Sarasota, or St. Lucie counties.

Immediate family of all current members are also eligible to join.

We're also proud to offer membership to our Select Employee Groups. Employees and members of these organizations are always welcome to join, no matter where they live:
 

Apply Today or Get in Touch for More Information

See Our Other Quality Home Loan Options

Fixed-Rate Mortgage

Relax knowing exactly how much your mortgage payment will be through your loan term so you can easily budget and plan for the future.

Veterans Mortgage

Eligible U.S. Veterans and other military personnel can get a VA loan with competitive rates, no down payment, no PMI, and no prepayment penalty.

FHA Mortgage

Low down payments and easier qualifying make this a great choice for first-time and repeat home buyers. Co-applicants may also help you qualify.

Page Disclaimers

*Lifetime cap of 6%, initial rate adjustment cap of 2% and subsequent periodic rate adjustment cap of 1%. If the loan is paid off earlier than 36 months (3 years) the lender’s credit will be added to the payoff. Floor rate is equal to initial rate. Adjustable Rate Mortgages are amortized over 30-year term. Primary residence only. Valid for purchase or refinance. Applicable on 3 yr./6 mo., 5 yr./6 mo., 7 yr./6 mo. and 10 yr./6 mo. Adjustable Rate Mortgages only.

**Power Financial Credit Union will pay for all eligible closing costs, excluding rate buy downs/points and prepaid items, up to a maximum of 2% of the loan amount. This is a limited-time promotion. All purchase and refinance fixed rate mortgages secured by a primary residence are eligible. Investment properties or second homes do not qualify. Subject to a three year recapture fee. If the loan is paid off earlier than 36 months (3 years), the lender credit will be added to the payoff.

1Rate is variable with an initial rate adjustment cap of 2%, a subsequent rate adjustment cap of 1% and a lifetime maximum cap of 6%. Other restrictions may apply.

3 yr./6mo. Adjustable Rate Mortgage of $350,000 at 30 years at 6.500%, you would make 36 fixed payments of $2,212.24 at 6.581% APR. After that, the fully indexed rate of 6.500% will apply to the remaining 324 payments and may vary every six months. Payment amount does not include taxes and insurance. Actual payment amount will be greater.

25 yr./5 yr. Adjustable Rate Mortgage is variable with a periodic cap of 2 percentage points above the index every 5 years with a lifetime maximum cap of 5 percentage points above the original rate. Other restrictions may apply. 5/5 Adjustable Rate Mortgage of $350,000 at 30 years at 6.750%, you would make 60 fixed payments of $2,270.09 at 6.832% APR. After that, the fully indexed rate of 6.750% will apply to the remaining 300 payments and may vary every five years. Payment amount does not include taxes and insurance. Actual payment amount will be greater.

Rates and offers are subject to change without notice.