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What is an Adjustable-Rate Mortgage (ARM)?
An Adjustable-Rate Mortgage (ARM) allows you to take advantage of a below-market fixed rate during the beginning of your mortgage term. After the initial low fixed period, the interest rate becomes adjustable based on a set index and margin. An ARM would benefit you most if you are planning to pay off or refinance your home in five to seven years.
An ARM would be best for you if:
- You want to keep payments lower during the early years of your loan.
- You plan to sell or pay off your mortgage within the loan's term.
- You expect your income to increase significantly in the coming years.
- You think interest rates may decrease in the future.
Benefits & Features
- Lower introductory rate1
- Lower monthly payments
- Monthly payments may decrease
- Ability to pay principal down faster
- Refinance options available
- Works with Idaho First-Time Homebuyer Savings
3/1, 5/1, 7/1, 5/5
As low as 15%
How an ARM Works
With an Adjustable-Rate Mortgage, the interest rate is fixed for a set amount of time. After the fixed period, the interest rate becomes variable, adjusting periodically for the remainder of the loan.
When reading term options, the first number is the number of years the interest rate is set at. The second number is how many years before the rate adjusts again, which occurs throughout the duration of the loan. For example, a 3/1 ARM has a fixed rate for the first 3 years, then an adjustable rate every year after. In the case of a 5/5 ARM, there is a fixed rate for the first 5 years, then an adjustable rate every 5 years after.
Apply for an Adjustable-Rate Mortgage (ARM)
Apply for a mortgage online or visit a CapEd location and ask about our ARM to get started.
Mortgage Loan Officers
We have an experienced and reliable team to assist you every step of the way when purchasing your home. If you're ready to apply for a mortgage, review the resources below and contact our Mortgage team to get started.
Here are some helpful resources to help you when getting ready to buy your new home.
Make sure you have everything you need to purchase your new home with this PDF.
This calculator collects important variables & determines your maximum monthly mortgage payment.
Estimate how much interest you can save by increasing your mortgage payments.
1 APR may adjust when the fixed rate period is over.
All loans are subject to approval. Rates listed are base rates. Rates, terms, and conditions may change without notice and may vary based on creditworthiness, qualifications, loan amounts, and collateral conditions.