Adjustable Rate Mortgage
Adjustable rate mortgages (ARMs), also known as a variable rate mortgage, is a type of home loan that has a variable interest rate that changes over time. Unlike a fixed rate mortgage, where the interest rate remains the same for the life of the loan, the interest rate on an ARM can fluctuate based on the market.
Why choose A St. Anne’s Mortgage?
St. Anne's Credit Union is a not-for-profit financial institution that can offer higher interest rates and lower fees than traditional banks. In additional to providing a personalized, local banking experience, St. Anne's invests in the local community and that's good for everybody.
5 things to know: Adjustable Rate Mortgages (ARMs)
1. Adjustable rate mortgages (ARMs) have interest rates that can change over time, unlike fixed rate mortgages.
2. The interest rate on an ARM is typically lower than a fixed rate mortgage in the initial stages of the loan.
3. The interest rate on an ARM is tied to an index, such as the federal funds rate, and can increase or decrease based on changes to the index.
4. ARMs typically have a cap on how much the interest rate can increase over the life of the loan.
5. ARMs usually have an initial fixed-rate period, after which the interest rate can change. This initial period can range from 1 to 10 years.
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