Adjustable Rate Mortgage (ARM)
Lower initial rate with future flexibility
An ARM starts with a lower fixed rate for a set period — typically 5, 7, or 10 years — and then adjusts periodically based on market indexes. Because the introductory rate is usually below the 30-year fixed rate, an ARM can mean lower payments early on.
Down Payment
5% – 20%
Min Credit Score
620+
Loan Term
5/6, 7/6, 10/6 ARM
Mortgage Insurance
PMI under 20% down
Loan Limit
Conforming or jumbo
Program Highlights
- ◆Lower introductory rate than 30-year fixed
- ◆Fixed for 5, 7, or 10 years before first adjustment
- ◆Built-in rate caps protect against large jumps
- ◆Strong fit for short- to mid-term ownership plans
Best For
- ◆Buyers planning to move or refinance within 5–10 years
- ◆Earlier-career professionals expecting income growth
- ◆High-priced markets where monthly cash flow matters
Qualification Requirements
- 01Minimum 620 FICO (700+ for best pricing)
- 02Reserves often required
- 03Qualifying ratios based on fully-indexed rate
Advantages
- +Lower payment during intro period
- +More buying power short-term
- +Great fit if you'll sell or refi before reset
Trade-Offs
- –Payment can increase after intro period
- –More planning required
- –Harder to budget long-term
How the Process Works
- 01Discuss ownership timeline
- 02Compare 5/6, 7/6, 10/6 options
- 03Underwrite at fully-indexed rate
- 04Close in 21–30 days
Frequently Asked
How does a 5/6 ARM work?+
The rate is fixed for the first 5 years, then adjusts every 6 months based on the SOFR index plus a margin, subject to annual and lifetime rate caps.
Are ARMs risky?+
Modern ARMs include caps that limit how much your rate and payment can change. They're a strong fit when you plan to move or refinance before the fixed period ends.
Ready to Get Started?
Apply online in minutes or talk through your scenario with our team.