With an adjustable rate mortgage (ARM), your interest rate may change periodically. compare adjustable-rate mortgage options and rates, including 5/1, 7/1 and 10/1 ARMs available from Bank of America.

A 5/1 ARM or a fixed-rate mortgage it will depend on your situation. A fixed-rate mortgage is the most popular mortgage term used today. With a fixed-rate loan you’re able to lock in todays low interest rate for the life of the loan.

For a time, taking that extra security didn’t cost much, since the adjustable rates weren’t that much lower than the fixed-rate options. But today, the rate spread between the 30-year fixed-rate.

A benefit of the 5/1 ARM is that for the initial five-year period, the interest rate generally will be lower than that offered by a 30-year fixed product. If the home you’re considering is a "starter" property and you’re looking to upgrade in five years or less, then a 5/1 ARM can make perfect sense.

5/1 ARM – the rate is fixed for a period of 5 years after which in the 6th year the loan becomes an adjustable rate mortgage (ARM). The adjustable rate is either tied to the 1-year treasury index or to the one-year London interbank offered rate ("LIBOR"), and is added to a pre-determined margin (usually between 2.25-3.0%) to

The interest rate then may change (adjust) each year thereafter once the initial fixed period ends. For example, with a 5/1 ARM loan for a 30-year term, your.

 · An adjustable rate mortgage, called an ARM for short, is a mortgage with an interest rate that is linked to an economic index. The interest rate and your payments are periodically adjusted up or down as the index changes.

Many homeowners and potential homeowners may be familiar with adjustable rate mortgages, or ARMs. Perhaps some of them might think that hybrid loans like the 3/1 or 5/1 ARM carry a higher risk, given the fallout from the mortgage crash in 2009.

Fha Current Interest Rate 5 Years Arm Mortgage Rates 5-Year ARM Mortgage Rates. A five year mortgage, sometimes called a 5/1 ARM, is designed to give you the stability of fixed payments during the first 5 years of the loan, but also allows you to qualify at and pay at a lower rate of interest for the first five years.Disclaimer. Monthly payments shown are principal and interest only and do not include PMI, taxes, insurance or other applicable escrows. Actual payment obligation will be greater.adjustable rate mortgages have interest rates which are subject to increase after consummation.Estimated future payments shown are based on current index plus margin (LIBOR plus 2.25%).Texas Mortgage Interest Rates Steven Miller your mortgage and refinance specialist in Texas. We handle your mortgage loan needs, customers can apply on-line and use our mortgage calculators. Work with mortgage professionals to get the best home loan. Apply directly online from our mortgage company website

A cash flow ARM is a minimum payment option mortgage loan.. As an example, a 5/1 ARM means that the initial interest rate.

As shown above, because the 5/1 ARM has a lower interest rate during its fixed-rate period than the 30-year fixed does, the buyer would pay $767.34 less in interest after five years and pay down $217.37 more of the principal balance of the loan. The results could quickly reverse once the 5/1 ARM’s interest rate begins adjusting, however.