Adjustable Rate Mortgage
An Adjustable Rate Mortgage (ARM) is a home loan where the interest rate stays fixed for an initial period—often 5, 7, or 10 years—before adjusting at set intervals based on a market index. Because ARMs typically start with a lower rate than traditional fixed-rate mortgages, they may offer a more affordable monthly payment in the early years of homeownership. For many buyers, this can be an ideal strategy when planning to move, refinance, or pay off the loan before the adjustment period begins.
What is a Adjustable Rate Mortgage?
An Adjustable Rate Mortgage (ARM) is a home loan that starts with a lower, fixed interest rate for an initial period—often 5, 7, or 10 years—making early monthly payments more affordable compared to many fixed-rate mortgages. After that introductory period, the rate will adjust at set intervals based on a market index, which means your payment could go up, down, or stay the same depending on economic conditions at the time.
Because of the lower introductory rate, ARMs can provide more buying power upfront and may be a strong option for buyers who expect to move, sell, or refinance before the adjustment period begins, or for those who want to take advantage of potential future rate improvements.
About Adjustable Rate Mortgage Rates
Adjustable Rate Mortgage (ARM) loans offer lower introductory rates that can provide a more affordable monthly payment during the early years of homeownership. This often allows buyers to increase purchase power or keep more cash each month for savings, remodeling, or other financial goals. After the fixed introductory term, the rate adjusts at preset intervals based on a market index and a fixed margin. Rate caps help protect against large payment increases, giving you a balance of short-term flexibility and long-term protection.
Adjustable Rate Mortgage Requirements
Minimum Credit Score
620+ recommended
Minimum Down Payment
3% – 5% for many conforming ARMs; Higher down payments may apply for investment properties or multi-unit homes
MAX LTV
Up to 97% LTV depending on program eligibility
Max DTI
DTI typically ≤ 50%
What type of home can I buy with a Adjustable Rate Mortgage?
✔ Primary residences
✔ Second homes
✔ Investment properties (varies by program)
✔ Single-family homes, townhomes, condos, some multi-unit homes
✔ Second homes
✔ Investment properties (varies by program)
✔ Single-family homes, townhomes, condos, some multi-unit homes
Who is eligible for a Adjustable Rate Mortgage?
620+ credit score recommended
Verifiable income and stable employment
DTI typically ≤ 50%
3%–5% minimum down payment for many conforming ARMs
Reserves may be required (2–6 months depending on profile)
Primary, second homes, and some investment properties eligible
Verifiable income and stable employment
DTI typically ≤ 50%
3%–5% minimum down payment for many conforming ARMs
Reserves may be required (2–6 months depending on profile)
Primary, second homes, and some investment properties eligible
How to Get Approved
✔ Maintain strong credit habits – On-time payments, lower utilization, and healthy credit history help secure better pricing.
✔ Keep debt-to-income (DTI) lower – We evaluate ability to repay based on future adjusted rates.
✔ Document consistent income – Employment stability and verified earnings improve eligibility.
✔ Keep debt-to-income (DTI) lower – We evaluate ability to repay based on future adjusted rates.
✔ Document consistent income – Employment stability and verified earnings improve eligibility.
Ready to Move Forward?
Whether you’re just exploring loan options or you’re ready to begin the process, we’re here to make it easier. Get clear guidance, fast answers, and a pre-approval experience built around your goals.