The Adjustable Rate Mortgage: Variable Interest Over Time
Adjustable rate mortgages, or as they are known in the trade, Arms, have some advantages and some disadvantages. See our section on Understanding Mortgages to assist you in making the right choice, or contact us today to discuss the best options for your needs.
1-year ARM |
1-year ARM -- A 1-year ARM is an adjustable-rate mortgage (ARM) that has an initial interest rate for one year, and thereafter has an adjustment interval of one year. The adjustment is based on a comparison of interest caps and the indexed rate. |
1/1 ARM |
1/1 ARM -- A 1/1 ARM is an adjustable-rate mortgage, or ARM, that has an initial interest rate for the first year, and thereafter has an adjustment interval of one year. Each annual rate adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note. |
3/1 ARM |
3/1 ARM -- A 3/1 ARM is an adjustable-rate mortgage, or ARM mortgage as it is sometimes called, that has an initial interest rate for the first three years, and thereafter adjusts each year. Each annual rate adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note. The rate can only change within limits -- by a specified amount each year, and a specified amount over the life of the loan. |
3/1 interest-only ARM |
3/1 interest-only ARM -- A 3/1 interest-only ARM is an adjustable rate mortgage in which none of the payments go toward retiring principal for the first three years. |
3/1 interest-only refinance ARM |
3/1 interest-only refinance ARM -- A 3/1 interest-only refinance ARM mortgage (as it is sometimes called) is an adjustable rate refi in which none of the payments go toward retiring principal for the first five years. Thereafter, it becomes an amortizing mortgage, with payments going toward both principal and interest, and it has an adjustment interval of one year. The adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note. |
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Loan Types
Primary
Fixed Rate
Adjustable Rate
Interest Only
Equity Loans
Zero Down
Construction Loans
Commercial Loans
Bridge Loans
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5/1 ARM |
5/1 ARM -- A 5/1 ARM is an adjustable-rate mortgage (ARM) that has an initial interest rate for five years, and thereafter has an adjustment interval of one year. The adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note. |
5/1 interest-only ARM |
5/1 interest-only ARM -- A 5/1 interest-only ARM is an adjustable rate mortgage in which none of the payments go toward retiring principal for the first five years. Thereafter, it becomes an amortizing mortgage, with payments going toward both principal and interest, and it has an adjustment interval of one year. The adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note. |
5/1 interest-only jumbo refinance ARM |
5/1 interest-only jumbo refinance ARM -- A 5/1 jumbo interest-only refinance ARM is a jumbo refi with fixed, interest-only payments for the first five years of the loan. After the five years are up, the loan converts to a loan whose payments cover both interest and principal, and which adjusts annually to current interest rates. A jumbo mortgage is a home loan that exceeds a certain amount (the 2006 limit is $ 416,000). Jumbo mortgages generally have a slightly higher interest rate than smaller (sometimes called "conventional" or "conforming") mortgages. |
5/1 interest-only refinance ARM |
5/1 interest-only refinance ARM -- A 5/1 interest-only refinance ARM is an adjustable rate refi mortgage in which none of the payments go toward retiring principal for the first five years. Thereafter, it becomes an amortizing mortgage, with payments going toward both principal and interest, and it has an adjustment interval of one year. The adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note. |
5/1 jumbo ARM |
5/1 jumbo ARM -- A 5/1 jumbo ARM is an adjustable-rate mortgage, or ARM, that has an initial interest rate for the first five years, and which changes annually thereafter, based on an index. A jumbo mortgage is a home loan that exceeds a certain amount (the 2006 limit is $ 416,000 ). Jumbo mortgages generally have a slightly higher interest rate than smaller (sometimes called "conventional" or "conforming") mortgages. |
5/1 jumbo interest-only ARM |
5/1 jumbo interest-only ARM -- A 5/1 jumbo interest-only ARM is a jumbo mortgage with fixed, interest-only payments for the first five years of the loan. After the five years are up, the loan converts to a loan whose payments cover both interest and principal, and which adjusts annually to current interest rates. A jumbo mortgage is a home loan that exceeds a certain amount (the 2006 limit is $ 416,000). Jumbo mortgages generally have a slightly higher interest rate than smaller (sometimes called "conventional" or "conforming") |
7/1 ARM |
7/1 ARM -- A 7/1 ARM is an adjustable-rate mortgage (ARM) that has an initial interest rate for seven years, and thereafter has an adjustment interval of one year. The adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note. |
10/1 ARM |
10/1 ARM -- A 10/1 ARM is an adjustable-rate mortgage, or ARM, that has an initial interest rate for the first 10 years, and thereafter has an adjustment interval of one year. Each annual rate adjustment is based on (or "indexed to") another rate -- often the yield on a Treasury note. | | |
