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Adjustable Rate Mortgage

While not technically a mortgage product on its own, Adjustable Rate Mortgages are so popular that they are often thought of as one.

While not technically a mortgage product on its own, Adjustable Rate Mortgages are so popular that they are often thought of as one. Any mortgage can be an Adjustable Rate Mortgage simply by having an interest rate that, well, adjusts.

 

Types of Adjustable Rate Mortgages

 

There are a number of mortgages that offer adjustable rates, and can therefore be called Adjustable Rate Mortgages. Some mortgages that offer adjustable rates are:

 

Benefit of an Adjustable Rate Mortgage

Adjustable Rate Mortgages have a few main benefits.

 

Lower Interest Rate

The initial interest rate on these adjustable products is often lower than their fixed-rate counterparts. The initial rate is often fixed for a period of time before it starts adjusting—typically five, seven, or 10 years. It will then adjust on a fixed schedule outlined when the loan is first obtained—typically every six to 12 months.

 

Flexibility

Adjustable Rate Mortgages may benefit those who are looking for a lower monthly payment at first, and expect to afford a larger payment as their income increases or their circumstances change. It also offers a lower monthly payment for those planning on selling before the interest rate begins to adjust.

Adjustable-Rate Mortgage Eligibility Requirements in 2026

DOWN PAYMENT

Varies based on loan product

TERMS

3, 5, 7, 10 years, variable

CREDIT SCORE

3, 5, 7, 10 years, variable

MORTGAGE INSURANCE

Maybe based on loan product

MAXIMUM LOAN AMOUNT

Varies based on loan product

Our Extensive Loan Product Offering Includes:

We leverage advanced lending technology to enhance every stage of the loan journey — from instant calculations and eligibility checks to secure document processing. This platform-driven approach allows us to deliver faster responses while maintaining accuracy and compliance.

  • Conventional Loans (including low down payment options)
  • FHA Loans
  • VA Loans (even for borrowers with credit challenges)
  • USDA Loans
  • Jumbo Loans
  • HELOCs and Home Equity Loans
  • Reverse Mortgages
  • 2-1 Buydowns (help your clients reduce their initial monthly payments)
  • Down Payment Assistance Programs (DPA)
  • Non-QM Loans (for borrowers who don’t fit traditional lending criteria)
  • DSCR Loans (multiple ways to structure for investors)
  • Bank Statement Loans (for self-employed borrowers)
Frequently Asked Questions

Adjustable Rate Mortgage

What is an Adjustable-Rate Mortgage (ARM)?
An Adjustable-Rate Mortgage is a home loan where the interest rate is fixed for an initial period and then adjusts periodically based on market indexes plus a margin set by the lender.
How does the rate adjustment work?
After the fixed period (e.g., 5, 7, or 10 years), the rate adjusts at scheduled intervals (often annually). Changes are tied to financial benchmarks like the Secured Overnight Financing Rate or other market indexes, subject to rate caps.
What are the benefits of an ARM?
ARMs typically start with lower initial interest rates than fixed-rate mortgages, which can mean lower early monthly payments—ideal for buyers planning to move or refinance before adjustments begin.
What are the risks of an ARM?
Your interest rate and monthly payment can increase after the fixed period, depending on market conditions. While caps limit how much rates can rise, long-term costs may exceed those of fixed-rate loans.

Interest Rates, APR’s & programs are illustrations subject to change at any time. These do not constitute a ‘Loan or Good Faith Estimate’ for payments and closing costs. Not all applicants will qualify. APR may vary by product type. Consumer is not obligated to use any party mentioned. Lender Express Mortgage is not affiliated with FHA, VA, USDA or the Federal Government. Lender Express Mortgage, LLC supports Equal Housing Opportunity (www.nmlsconsumeraccess.org) | (888) 286-0367 | 2500 S Power Rd Bldg 9 Ste 133, Mesa, AZ 85209. Regulated by the AZ Department of Financial Institutions. Arizona License #MB-1008082, CA #60DBO-140688, CO #MB-1963444, FL #MBR4665, IA #1963444, OR #1963444, PA #79751, TX #1963444. Figure: 7 tac § 80.200(b) consumer wishing to file a complaint against a company or a residential mortgage loan originator should complete and send a complaint form to the Texas department of savings and mortgage lending, 2601 North Lamar, suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department website at www.Sml.Texas.Gov. A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.Sml.Texas.Gov. Above information and content is accurate as of 6/22.