Adjustable Rate Mortgages (ARMs)

Depending on your situation, an ARM could be just the mortgage you’re looking for

With an adjustable-rate mortgage:

  • Typically has a rate lower than a 30-year fixed rate that allows a lower payment. A lower rate can also allow you to qualify for a larger loan for your home.
  • Your interest rate is linked to an economic index, so it adjusts up—or down—as it changes.

ARMs work well if you have a stable income that is likely to increase over time. They can also save you money if you plan to move or pay off your mortgage before the end of your introductory rate period.


Get preapproved

Find out how much you can borrow, and let sellers know you’re ready to buy.

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Choose your home

Make your wish list, choose a real estate agent, and find your dream home.


Make an offer

If your offer is accepted, you’ll need a home inspection and appraisal.


Close the sale

Once you sign the paperwork, you can get the keys and prepare to move in.

Yes, your monthly payment is likely to change if you choose an adjustable-rate mortgage. Your interest rate is linked to an economic index, so it adjusts up or down as the index changes. If your rate goes up, then your monthly payment also goes up. Similarly, if your rate drops, you’ll have a lower monthly payment.

Many adjustable-rate mortgages have an introductory period when the interest rate remains stable. Your mortgage originator can walk you through the pros and cons of fixed- and adjustable-rate mortgages to help you find the loan that works best for you.

Your down payment depends on several factors, such as the price of your new home and the type of loan you want. Many people put 20% down, but it’s possible to buy a home with a lower down payment, or even no down payment in some cases.

If your down payment is less than 20%, you’ll need to get private mortgage insurance, which protects your lender if you default on your mortgage.

With a down payment of 20%, you might qualify for a lower interest rate. And the larger your down payment, the lower your monthly mortgage payment will be. A higher down payment can also give you a competitive advantage over other buyers, especially in a competitive market.

If you want to buy a home within the next few months, then it’s a good idea to get preapproved. Preapproval shows the seller that you’re serious about buying and you have the funds you need to make a purchase. If you’re searching for a home in a competitive market, preapproval makes your offer more attractive to sellers and gives you a critical advantage over other potential buyers.

While many lenders cancel their preapprovals after 90 days, there’s no expiration date on ours. If any of the documents in your credit approval file are out of date, we’ll offer you the opportunity to update them so that you can keep your preapproval in place.

Your credit score affects the interest rate you qualify for when you apply for a mortgage. With a higher credit score, you can usually qualify for a lower interest rate, which lowers your monthly payment and reduces the overall cost of your loan.

If you’re not sure what your credit score is, you can request a free copy of your credit score every 12 months from If your credit score isn’t as high as you’d like it to be, here are some tips for improving your credit.

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