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Adjustable Rate Mortgage (ARM)

Choose the Adjustable Rate Mortgage that fits your financial needs. We have various options below.

  • 3/1 ARM: 5.25% APR* – Fixed for 3 Years! Rate may increase after 3 years. Ideal for short-term owners planning to sell or refinance before the fixed period ends, allowing you to benefit from the low rate without facing adjustments.
  • 5/1 ARM: 5.50% APR* – Fixed for 5 Years! Rate may increase after 5 years. Perfect if you plan to move or refinance within 5-7 years, you benefit from the low rate and avoid market fluctuations.
  • 7/1 ARM: 5.75% APR* – Fixed for 7 Years! Rate may increase after 7 years. Great if you plan to sell or refinance within seven years, avoiding rate adjustments and budgeting.

Benefits

  • Great for New Home Purchases or Refinancing
  • Save Money With a Low Rate

APPLY TODAY!

What is an ARM? (Adjustable Rate Mortgage)

An ARM (Adjustable Rate Mortgage) has an interest rate that changes over time, unlike fixed-rate mortgages with a constant rate. ARMs typically start with a lower rate, making them a smart option if you plan to own your home short-term, expect income growth, or find fixed rates too high.

How Adjustable-Rate Mortgages (ARMs) Work?

ARMs have two key phases: a fixed period and an adjustment period. Here’s how the two differ:

  • Fixed Period: The interest rate doesn’t change during this period. It can range anywhere between the first five, seven, or ten years of the loan. This is commonly known as the intro or teaser rate.
  • Adjusted Period: This is the point at which the rate changes. Changes are made during this period based on the underlying benchmark, which fluctuates based on market conditions.

What are the benefits of an ARM?

  • Lower initial interest rate than a fixed-rate mortgage
  • Potential savings in early years of the loan
  • Great for short-term homeowners or those expecting increased income

Is an ARM Right for You?

An ARM can be a smart financial choice if you are planning to keep the loan for a limited time and will be able to handle any rate increases in the meantime. Put simply, an adjustable-rate mortgage is well suited for the following types of borrowers:

  • People who intend to hold the loan for a short period of time
  • Individuals who expect to see a positive change in their income
  • Anyone who can and will pay off the mortgage within a short time frame

Bottom Line

When comparing mortgage options, it’s important to know the difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM). Fixed rates offer stability, while ARMs start lower but adjust with the market. Not sure which is right for you? Our team can help guide your home financing decision.

Information above was obtained from the following sources:

https://www.hud.gov/hud-partners/single-family-203armt

https://www.investopedia.com/terms/a/arm.asp

Open an ARM today.

You can open an ARM online, over the phone, or in person.

*APR=Annual Percentage Rate. The 3/1, 5/1, and 7/1 ARM offers a fixed rate for the initial period of the loan and adjusts to a one-year ARM after that period. 3/1 ARM Payment Example: A $250,000 mortgage loan with $3,353.40 closing costs will be paid in 360 monthly installments. The payment would be $1,381.51 for the first 36 months. 5/1 ARM Payment Example: A $250,000 mortgage loan with $3,353.40 closing costs will be paid in 360 monthly installments. The payment would be $1,419.47 for the first 60 months. 7/1 ARM Payment Example: A $250,000 mortgage loan with $3,353.40 closing costs will be paid in 360 monthly installments. The payment would be $1,458.93 for the first 84 months. The interest rate may change on the anniversary date of the loan closing and then on that day every 12th month thereafter based on the one-year Constant Maturity Treasury (CMT). The maximum rate change per adjustment is 2% and the maximum lifetime interest rate change is 6% with a floor rate of 3%. The payment example is the maximum loan payment amount. Payment examples do not include taxes and insurance premiums. Rates and terms are subject to change without notice. Subject to approval of application. Contact a Bridge mortgage loan officer for any applicable restrictions and further program details. Bridge Credit Union NMLS# 402575. Offer subject to change without notice. Federally Insured by the NCUA.