Your rate stays fixed for the opening period, such as 5, 7, or 10 years, depending on the ARM structure.
ADJUSTABLE-RATE MORTGAGE
Adjustable-Rate Home Loans With Flexible Terms
Start with a lower rate during the fixed period and keep more cash flow in the early years. Makes the most sense when you plan to sell or refinance before the rate adjusts. Available across our seven licensed states.
Independent Brokerage, Many Lenders
Licensed in 7 States
NMLS #2367229
Decades of Combined Experience
ARM BASICS
What Is an Adjustable-Rate Mortgage?
An adjustable-rate mortgage is a home loan with an interest rate that stays fixed for an initial period and then adjusts periodically based on market conditions. A 5/6 ARM is fixed for five years, then adjusts every six months. A 7/6 is fixed for seven years, then every six months. ARMs typically offer a lower starting rate than a 30-year fixed mortgage.
Fixed Starting Period
Scheduled Adjustments
After the fixed period, the rate can adjust at scheduled intervals based on the loan terms.
Timeline Matters
An ARM can make sense when your expected ownership or refinance timeline fits the fixed-rate window.
ARM VS FIXED
How Does an ARM Compare to a Fixed-Rate Loan?
A fixed-rate mortgage gives you the same rate for the life of the loan. An ARM typically starts lower, then adjusts on a set schedule after the fixed period ends. The right choice depends on your timeline, your risk comfort, and whether a higher future payment would be manageable.
| Item | ARM | 30-year fixed | 15-year fixed |
|---|---|---|---|
| Starting rate | Typically lower than a comparable fixed | Higher than an ARM's initial rate | Typically lower than a 30-year |
| Rate stability | Fixed for the initial period, then adjusts | Fixed for the life of the loan | Fixed for the life of the loan |
| Payment predictability | Predictable during the fixed period only | Fully predictable | Fully predictable |
| Future payment risk | Can rise substantially after the fixed period | None from rate changes | None from rate changes |
| Best fit | A shorter ownership or refinance timeline | Long-term payment stability | Faster payoff when the budget supports it |
POTENTIAL BENEFITS
What Are the Potential Benefits of an Adjustable-Rate Mortgage?
An ARM is not for every borrower, but it can be useful when the lower starting payment matches the way you plan to use the home or loan.
Lower Initial Rate
ARM loans may start with a lower interest rate than comparable fixed-rate options.
Reduced Early Payment
A lower starting rate may reduce the initial monthly payment and improve short-term cash flow.
Timeline Flexibility
Useful for borrowers who expect to sell, refinance, or change their loan strategy within a shorter window.
Purchase or Refinance
ARM options may be available for both home purchases and refinance scenarios.
THE REAL TEST
How Do ARM Rate Adjustments Work?
Index Plus Margin
After the fixed period, your rate is calculated as an index plus a lender-set margin. The margin is fixed at closing and never changes. The index moves with the market, which is what makes the rate adjustable.
Caps Limit the Movement
Every ARM has caps limiting how far the rate can rise at the first adjustment, at each adjustment after that, and over the life of the loan. Cap structures vary by lender and by program. Ask what yours are before you commit, and get them in writing.
Budget Against the Maximum, Not the Start
The starting payment is not the number to plan around. Ask your broker to calculate the highest payment your loan could reach under its lifetime cap, and decide whether you could carry that payment. If the answer is no, an ARM is not the right loan, no matter how attractive the initial rate looks.
We walk every ARM borrower through the maximum possible payment before they sign. If the numbers do not work at the ceiling, we will tell you so.
WHO IT FITS
Who May Consider an Adjustable-Rate Mortgage?
An ARM is a strong option for borrowers who plan to sell or refinance before the fixed period ends. It is not the right fit for borrowers who plan to stay long term and want rate certainty.
May Fit When
- You expect to sell before the initial fixed period ends.
- You plan to refinance before the rate adjusts.
- You want a lower starting payment during the early years.
- You understand the adjustment caps and future payment risk.
May Not Fit When
- You want the same rate for the full loan term.
- You plan to keep the mortgage long term.
- A future payment increase would strain your budget.
- You are uncomfortable with rate uncertainty after the fixed period.
THE BROKER ADVANTAGE
One Broker. Many ARM and Fixed-Rate Options.
A bank can only offer what that bank sells. If their ARM pricing is uncompetitive this week, or if their only ARM has a cap structure that does not suit you, you will never hear about it, because they have no reason to tell you.
We are independent. We compare ARM structures, caps, and margins across our lender network, not just the initial rate, and show you the full picture alongside fixed-rate options side by side.
If a 30-year or 15-year fixed loan fits your timeline better, we will tell you that too.
ADJUSTABLE RATE FAQ
Questions Buyers Ask About ARMs
What is an adjustable-rate mortgage?
An adjustable-rate mortgage carries a fixed rate for an initial period, commonly five, seven, or ten years, then adjusts periodically based on an index plus a margin set in your note. The initial rate is typically lower than a comparable fixed loan. What happens after that period is governed by caps written into the loan.
What do the numbers in a 5/6 ARM mean?
The first number is how many years the initial rate stays fixed. The second is how often it adjusts after that, expressed in months. A 5/6 ARM is fixed for five years, then adjusts every six months. A 7/6 is fixed for seven years, then every six months. The structure is written into your note and does not change.
How high can my ARM payment go?
Every ARM carries caps that limit how much the rate can move at the first adjustment, at each subsequent adjustment, and over the life of the loan. Those three caps set the worst case, and you should know all three before you sign. We walk you through the maximum payment, not just the starting one.
Is an ARM a good idea?
It can be, if your time horizon is shorter than the fixed period. Buyers who expect to sell or refinance within five to seven years often pay meaningfully less with an ARM than a fixed loan. It is a poor fit if you plan to stay indefinitely and would struggle with a higher payment later. The honest question is how long you will hold the loan.
What happens when the fixed period ends?
The rate adjusts to the current index value plus your margin, subject to the caps in your note. It may go up, and it may go down. You are not locked in at that point, so refinancing into a fixed loan is an option if rates and your situation allow. Many borrowers plan for that in advance rather than waiting.
Can I refinance out of an ARM?
Yes. There is no penalty for refinancing out of an ARM on our loan programs, and homeowners often move into a fixed loan before or shortly after the first adjustment. Whether it makes sense depends on where rates sit and how much equity you have. We are happy to review it well before the adjustment date.
Are ARM rates lower than fixed rates?
During the initial fixed period, usually yes, because the lender is taking on less long-term rate risk. The size of that gap moves with the market and differs between lenders on the same day. Comparing ARM and fixed pricing side by side across multiple lenders is the only way to see whether the discount is worth the trade-off for you.
How long does it take to close an ARM?
Closing takes 21 to 30 days in most cases once you have an accepted offer and your documents are in. Pre-approval typically takes one to two business days. We are licensed in Oregon, California, Washington, Idaho, Texas, Florida, and Montana, with offices in Salem and Eugene, Oregon.
Ready to Compare ARM and Fixed-Rate Options?
We compare adjustable-rate and fixed-rate loan programs across multiple lenders so you see the real cost difference before you decide. Licensed in OR, CA, WA, ID, TX, FL, and MT.