A popular program for borrowers who plan to keep the loan less than ten years, the 10/1 ARM is a loan with a fixed rate and payment for the first ten years and then turns into an adjustable rate mortgage for the remaining 20 years of the loan.. The primary advantage of the 10/1 ARM is a lower initial rate and payment than available on a 30 year fixed rate mortgage.
The interest rate and payment is fixed for the first 120 months of the loan’s 30 year term. At the end of the 120 months, the interest rate adjusts to the lower of:
1. The 1-Year LIBOR Index plus 2.25%, or
2. The initial start rate plus 5%.
Thereafter, the interest rate will adjust every 12 months to the lower of:
1. The 1-Year LIBOR Index plus 2.25%,
2. The previous rate plus 2%, or
3. The initial start rate plus 5%.
We offer the 3 main adjustable rate mortgage program options, with the fixed rate portion of the loan ranging from 5 years to 10 years. Visit our specific ARM rate program pages to see how each can benefit you!