Adjustable-Rate Mortgage (ARM)
Why Choose an Adjustable-Rate Mortgage
Flexible financing designed for homebuyers who expect to move, refinance, or pay off their mortgage before the initial fixed period ends.
Start With a Lower Rate
ARM rates are often lower than comparable fixed-rate mortgages, reducing monthly payments during the initial fixed period.
Stretch Your Buying Power
Lower starting payments may allow you to qualify for more home while keeping monthly costs manageable.
Match Your Future Plans
A 5/6 ARM, 7/6 ARM, or 10/6 ARM may make sense if you expect to relocate, refinance, or sell before the first adjustment.
How an Adjustable-Rate Mortgage Works
The Rate
Fixed for an initial period, then adjusts based on market conditions.
The Term
Full mortgage term remains 30 years, even after the rate begins adjusting.
Initial Payment
ARM rates are often lower than comparable fixed-rate mortgages.
Rate Adjustments
Future changes are limited by ARM rate caps.
The Breakdown
5%
Minimum Down Payment
620+
Credit Score
≤50%
Debt-to-Income Ratio
Run the Numbers
Find Out What You Can Afford
Compare ARM vs. Fixed Payments
Lock In Your ARM Rate
Answer a few quick questions and we'll show you the ARM options, rate, and estimated monthly payment you may qualify for.
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Frequently Asked Questions
What is an adjustable-rate mortgage (ARM)?
An adjustable-rate mortgage (ARM) is a home loan that starts with a fixed interest rate for a set period of time, then can adjust based on market conditions. ARMs may offer a lower initial rate than some fixed-rate mortgages, making them an option for borrowers who expect to move, refinance, or pay off their loan before the adjustment period begins.
How does an ARM differ from a fixed-rate mortgage?
A fixed-rate mortgage keeps the same interest rate for the life of the loan, while an ARM starts with a fixed rate that may change after the initial fixed period ends. Borrowers who value predictability often prefer a fixed-rate mortgage, while those looking for a lower initial rate may consider an ARM.
What do ARM loan terms like 5/6 or 7/6 mean?
The first number indicates how long the initial fixed-rate period lasts. For example, a 5/6 ARM has a fixed rate for the first five years. After that, the interest rate can adjust every six months based on the terms of the loan.
Is an ARM right for me?
An ARM may be a good fit if you expect to move, refinance, or pay off your mortgage before the fixed-rate period ends. The right loan depends on your financial goals, timeline, and comfort level with the possibility of future rate changes.
Can I refinance my ARM into a fixed-rate mortgage later?
Depending on borrower qualifications, available loan programs, and market conditions, some borrowers may be able to refinance an ARM into a fixed-rate mortgage before future rate adjustments occur.