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5/5 ARM

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5/5 Adjustable Rate Mortgage

Our Adjustable Rate Mortgage is different than a typical ARM in that your Annual Percentage Rate will stay the same for the first 5 years of the loan versus changing every year. After the initial 5 years, the rate will only adjust every 5 years for the life of the loan, depending on the market. Compared to a Fixed Rate home loan, the 5/5 ARM offers a lower APR initially, which can increase your buying power. If you are looking for the lowest rate ARM possible, you may want to consider a 5/1 ARM, which typically has a lower APR than the 5/5 ARM.

Best Choice If:

  • The loan amount you are looking to finance is under $453,101.
  • You are looking to enhance your buying power, and you want to take advantage of a lower initial rate versus a Fixed Rate loan, but at the same time, want to know your rate will be stable for 5 year periods.
  • You want to keep your rate, which affects monthly payments, low at the beginning of your loan.
  • If you want an ARM, but you value stable payments over the lowest initial rate possible. If you are looking for the lowest APR, you may want to consider a 5/1 ARM; however, the APR can change annually after the first 5 years versus a 5/5 ARM where the rate can only adjust every 5 years.

Other Features:

  • Rate caps = 2% per adjustment and 5% over the lifetime of the loan. A rate cap is a limit on how much the rate can change at the end of each adjustment period over the life of the loan.
  • Index = 1 Year LIBOR
  • Margin = 2.000%
  • Conversion to a Fixed Rate home loan is not currently available.

An example APR for a 5/5 Year ARM loan is 4.774%. An example monthly mortgage payment of principal and interest is $499. The example quotes are based on a property value of $200,000 and a loan amount of $100,000. The Annual Percentage Rates (APR) stated is an estimate and is intended for informational use only. Your actual APR may vary based on your actual loan amount. Please speak with a Loan Executive for additional information about our rates and fees. Rates are subject to change without notice. Your actual rate and/or points may be different, as many factors are evaluated for a loan approval. This product is subject to change or cancellation at any time without prior notice.

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