Adjustable Rate Mortgages (ARM)
A lower starting rate for buyers with a plan.
How an ARM works
An adjustable rate mortgage starts with a fixed rate for an initial period, commonly 5, 7 or 10 years. After that, the rate adjusts at set intervals based on a market index plus a margin. Caps limit how much the rate can change at each adjustment and over the life of the loan.
Who it’s best for
- Buyers who expect to sell or move before the fixed period ends
- Borrowers expecting income growth or a future refinance
- Jumbo borrowers, where ARM pricing is often especially competitive
Understand the risk
After the initial period, your payment can rise if rates are higher. Curtis walks every ARM client through the index, margin and caps, and shows the worst case payment so there are no surprises. If you would lose sleep over a possible increase, a fixed rate may be the better fit, and Curtis will tell you so.
Frequently asked questions
What do numbers like 7/6 mean?
The first number is how many years the rate is fixed. The second describes how often it adjusts afterward. A 7/6 ARM is fixed for seven years and then adjusts every six months.
Can I refinance out of an ARM?
Yes, subject to qualifying at that time. Many borrowers refinance into a fixed loan before the first adjustment.
This page is general information, not a commitment to lend or an offer of credit. Program availability, eligibility and terms depend on your credit, income, property and lender guidelines and are subject to change. Contact Curtis for options specific to you.
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