What is an ARM? 

In short, an Adjustable Rate Mortgage, or ARM, is a home loan with an interest rate that can change periodically. This means that the monthly payments can go up or down throughout the life of the loan. Generally, the initial interest rate is lower than that of a comparable Fixed-Rate Mortgage

ARM VS Fixed

Many homebuyers prefer an ARM, opposed to a fixed-rate, because of the initial lower rate they get. This could be a better option for those that want a lower monthly payment and the house may not be their forever home. See below for key differences between an ARM and a Fixed mortgage.  

ARM

  • Great for first time home-buyers (lower payment in first years)
  • For those who plan on moving and/or selling their property within the fixed period of their mortgage
  • Lower interest rates than fixed rate loan, but may change over time

Fixed Mortgage

  • Great for people who know they will not be selling or moving any time soon
  • Easier to budget long-term
  • Provides protection from changes in mortgage rates

ARM Options

Whether you're a first time home buyer or looking to save on your monthly payments by refinancing from a fixed to an ARM, learn more about some of the popular Adjustable Rate Mortgage options offered by Cal Coast: