What is an Adjustable-Rate Mortgage (ARM)?

A loan that initially has a fixed rate for a designated time period. The rate will then adjust based on the loan terms and the current market conditions.

How does an Adjustable-Rate Mortgage (ARM) work?

Variations can occur with an ARM. Generally, an ARM will have a designated time period for the initial fixed rate, then will change per the loan terms. For example, a 5/1 ARM will have an initial 5-year fixed rate period. Beginning the 6th year, the rate will adjust yearly according to the current market rates. The first number indicates the fixed rate time period, the second number indicates the variable rate time period.

When does my ARM rate begin to adjust?

An ARM will have an initial fixed rate for a designated time period. The change will occur according to your loan terms. This can happen yearly or every 6 months, depending on your lender. Goldenwest Credit Union currently offers ARMs with variable rates adjusting yearly, after the initial fixed rate time period.

Does my monthly payment change?

During the fixed rate time period your monthly principle and interest payment will remain the same. Once the variable rate time period starts, your monthly principle and interest payment will change based on your rate adjustment.

What are the risks of an Adjustable-Rate Mortgage (ARM)?

Risks to be aware of while considering an ARM vary. An ARM does include a fixed rate for a set period. After the fixed period, the rate becomes variable. Due to the rate becoming variable, your payments will adjust. Most people choose to refinance their mortgage towards the end of their fixed rate period due to variability.

What are the benefits of an Adjustable-Rate Mortgage (ARM)?

Benefits include: - Lower initial payments - Lower initial interest rate - Beneficial option for a second home or investment property

Can I refinance from an Adjustable-Rate Mortgage (ARM) to a fixed rate mortgage?

Yes, this is generally the purpose for an ARM. An initial lower rate offers flexibility to future market conditions.

Adjustable Rate Mortgages

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Looking for a home loan with lower initial rates and the flexibility to adapt to future market conditions?

Our ARM options might just be the perfect fit.

Benefits of a USU Credit Union ARM loan:

Up to 90% financing
Second home, investment, jumbo
No private mortgage insurance
Amortized over 30 years
1% origination fee
2/1 buydown option

Adjustable Rate Mortgage Rates*

As low as
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Which ARM loan is right for you?

With various adjustable-rate mortgage options, choosing the right one can help you balance flexibility and long-term savings. Each type of ARM offers unique benefits, depending on how long you plan to stay in your home and your financial goals.

5/1 ARM

20% Down Payment for Purchases
Cash Out Refinances Up to 80% LTV

7/1 2nd Home or Investment Property

10% Down Payment for Purchases
Cash Out Refinances up to 90% LTV

7/1 ARM Jumbo

20% Down Payment for Purchases
Cash Out Refinances Up to 80% LTV

ARMS compared to other mortgage loans

Considerations

Uncertainty about future rate adjustments
Potential rate increase and corresponding increase to your payment, after the initial fixed rate period
Need a plan for higher payments after the rate adjustment, and how you will afford the increased payment amount

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Frequently Asked Questions

What is an Adjustable-Rate Mortgage (ARM)?

A loan that initially has a fixed rate for a designated time period. The rate will then adjust based on the loan terms and the current market conditions.
How does an Adjustable-Rate Mortgage (ARM) work?

Variations can occur with an ARM. Generally, an ARM will have a designated time period for the initial fixed rate, then will change per the loan terms. For example, a 5/1 ARM will have an initial 5-year fixed rate period. Beginning the 6th year, the rate will adjust yearly according to the current market rates. The first number indicates the fixed rate time period, the second number indicates the variable rate time period.
When does my ARM rate begin to adjust?

An ARM will have an initial fixed rate for a designated time period. The change will occur according to your loan terms. This can happen yearly or every 6 months, depending on your lender. Goldenwest Credit Union currently offers ARMs with variable rates adjusting yearly, after the initial fixed rate time period.
Does my monthly payment change?

During the fixed rate time period your monthly principle and interest payment will remain the same. Once the variable rate time period starts, your monthly principle and interest payment will change based on your rate adjustment.
What are the risks of an Adjustable-Rate Mortgage (ARM)?

Risks to be aware of while considering an ARM vary. An ARM does include a fixed rate for a set period. After the fixed period, the rate becomes variable. Due to the rate becoming variable, your payments will adjust. Most people choose to refinance their mortgage towards the end of their fixed rate period due to variability.
What are the benefits of an Adjustable-Rate Mortgage (ARM)?

Benefits include:
- Lower initial payments
- Lower initial interest rate
- Beneficial option for a second home or investment property
Can I refinance from an Adjustable-Rate Mortgage (ARM) to a fixed rate mortgage?

Yes, this is generally the purpose for an ARM. An initial lower rate offers flexibility to future market conditions.

Adjustable Rate Mortgage Loans

Discover the flexibility of ARM loans.

Looking for a home loan with lower initial rates and the flexibility to adapt to future market conditions?

Our ARM options might just be the perfect fit.