What Is A 5/1 Adjustable Rate Mortgage?

What is a 5/1 ARM?

A 5/1 Adjustable Rate Mortgage (ARM) is a type of mortgage where the interest rate is fixed for the first five years and then adjusts annually for the remaining term. The "5/1" refers to the initial fixed period of five years, during which your interest rate remains constant. After the initial period, the rate can fluctuate based on changes in a specified financial index, which is often linked to market interest rates.

For example, if you have a 5/1 ARM with a 3% initial interest rate, it will stay at 3% for the first five years. After that, the rate can go up or down each year, depending on the market conditions and the terms of your mortgage agreement. It's essential to understand the potential for rate increases and how they may impact your monthly payments. 

For more information on the 5/1 Adjustable Rate Mortgage or any of our other loan products please reach out to one of our experienced mortgage loan advisors.

Park Place Financial Group

Joe Costa and Marni Wolf

402 West Broadway

Suite 400

San Diego, CA 92101

619-990-7552

www.parkplacefg.com

info@parkplacefg.com