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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 better 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 |
|---|---|---|---|
| 3/1 ARM1 | 2.625% | 4.009% | 0.000 |
| 5/1 ARM1 | 2.750% | 3.925% | 0.000 |
| 5/5 ARM2 | 3.000% | 3.693% | 0.000 |
| 7/1 ARM1 | 3.000% | 4.053% | 0.000 |
| 10/1 ARM1 | 3.000% | 3.804% | 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.
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:
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:
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:
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.
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:
Fixed-Rate Mortgage
Veterans Mortgage
FHA Mortgage
*Annual Percentage Rate (APR).
**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.
***5/5 ARM- Rate is variable with a periodic cap of 2 percentage points every 5 years with a lifetime maximum cap of 5%. Other restrictions may apply. Payment example- For a 5/5 Adjustable Rate Mortgage of $350,000 at 30 years at 4.875%, you would make 60 fixed payments of $1,852.23 at 4.948% APR. After that, the fully indexed rate of 4.875% 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.
Rate 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 6.125%, you would make 36 fixed payments of $2126.64 at 6.204% APR. After that, the fully indexed rate of 6.125% 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.
5 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 6.125%, you would make 60 fixed payments of $2126.64 at 6.204% APR. After that, the fully indexed rate of 6.125% 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.
*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.