Adjustable Rate Mortgages and Adjustable Rate Mortgages Rates (ARM)

Mortgage Type

Adjustable Rate Mortgages

Key Features

Interest rate (and monthly principal and interest payments) adjusts periodically based on an index. The initial rate can be locked in for different periods. Some lenders offer introductory periods of one, three, five, seven, or ten years. Typically the rate readjusts annually after the introductory period.

Customer Benefits

The initial interest rate (and monthly payment) is usually lower than that of a fixed-rate mortgage, after which the rate adjusts periodically, based on a market index. Borrowers are typically protected from steep increases in rates through annual and lifetime adjustment caps.

Home buyer’s Scenario

An ARM may be a good choice for borrowers who plan to live in their home a short period of time or can manage to make larger monthly payments after the rate adjusts.

Adjustable Rate Mortgage (ARM) Rates

Loan assumptions and Disclosures Interest rates and annual percentage rates (APRs) are based on current market rates, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables—call for details at (671) 472-5300. This is not a credit decision or a commitment to lend. Depending on loan guidelines, mortgage insurance may be required. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. Additional loan programs may be available. APR reflects the effective cost of your loan on a yearly basis, taking into account such items as interest, most closing costs, discount points (also referred to as “points”) and loan-origination fees. One point is 1% of the mortgage amount (e.g., $1,000 on a $100,000 loan). Your monthly payment is not based on APR, but instead on the interest rate on your Note. Adjustable-rate mortgage (ARM) rates assume no increase in the financial index after the initial fixed period. ARM rates and monthly payments are subject to increase after the initial adjustment period: ARMs assume 25-year term. Program not available in the Federated States of Micronesia (FSM), Republic of the Marshall Islands (RMI), Republic of Belau, and other select markets. Normal credit qualifications and other terms and conditions apply. This does not represent an offer to enter a loan agreement. Loans subject to credit approval. Products, rates, and terms subject to change without notice. Prepayment penalties do not apply.