5 1 Adjustable Rate Mortgage

But what is the difference between a fixed rate and adjustable rate mortgage? Simply put, a fixed rate mortgage locks in a consistent interest rate for the life of the loan, while the interest rate with an adjustable rate mortgage will change after an initial fixed-rate period.

Since the 5/1 ARM is a blend of a fixed-rate and adjustable-rate loan, it can also be known as a hybrid mortgage. How 5/1 ARM interest rates adjust Adjustable-rate mortgages are less predictable than fixed-rate loans and are directly impacted by economic factors after you‘ve started repaying the loan.

Initial rates on a 5-1 ARM sometimes run a full percentage point or more below that of a comparable 30-year fixed rate mortgage, so the.

Mortgage loans come in many varieties. One is the adjustable-rate mortgage, commonly referred to as the ARM. Unlike a fixed-rate mortgage, in which the interest rate is locked in for the life of the loan, an ARM is a mortgage that has an interest rate that changes.

VA adjustable-rate mortgages (ARMs) can make good sense for the right. For example, a 5/1 hybrid ARM features a fixed interest rate for five.