Rate is fixed for a period of 5, 7 or 10 years
After the fixed-rate period, your interest rate may change once per year – either up or down
No prepayment penalty
Adjustable Rate Mortgages (ARM) may provide you with the flexibility of a lower starting interest rate and initial monthly payment. ARM loans are well-suited for people who don’t plan to stay in the property long-term, or expect their income to rise over time. It is important to keep in mind that the rate adjusts based on market rates, and fluctuates periodically based on financial market conditions, which may result in a higher monthly payment.