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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.
| Term | Rate | APR | Points |
|---|---|---|---|
| 3 yr./6 mo. ARM1 | 5.375% | 5.450% | 0.000 |
| 3 yr./6 mo. ARM1 _ No closing costs up to 2% of amount financed* | 5.625% | 5.626% | 0.000 |
| 5 yr./6 mo. ARM1 | 5.625% | 5.701% | 0.000 |
| 5 yr./6 mo. ARM1 _ No closing costs up to 2% of amount financed* | 5.875% | 5.877% | 0.000 |
| 5 yr./5 yr. ARM2 | 5.750% | 5.827% | 0.000 |
| 5 yr./5 yr. ARM2 _ No closing costs up to 2% of amount financed* | 6.000% | 6.002% | 0.000 |
| 7 yr./6 mo. ARM1 | 5.875% | 5.952% | 0.000 |
| 7 yr./6 mo. ARM1 _ No closing costs up to 2% of amount financed* | 6.125% | 6.127% | 0.000 |
| 10 yr./6 mo. ARM1 | 6.125% | 6.204% | 0.000 |
| 10 yr./6 mo. ARM1 _ No closing costs up to 2% of amount financed* | 6.375% | 6.377% | 0.000 |
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.
– Jose T.
ARMs that have fixed rates for a certain period and then the rates adjust are also known as Hybrid ARMs.
You may choose:
ARMs generally have a total loan term of 30 years.
Fixed-Rate Mortgage
Veterans Mortgage
FHA Mortgage
*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 5.250%, you would make 36 fixed payments of $1,932.71 at 5.324% APR. After that, the fully indexed rate of 5.250% 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 5.500%, you would make 60 fixed payments of $1,987.26 at 5.576% APR. After that, the fully indexed rate of 5.500% 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.