7 Year Adjustable Rate Mortgage (ARM)
Features & benefits
- The rate is fixed for seven years and then switches to a one year adjustable rate in the eighth year. The initial rate is normally lower than a fixed rate. Annual rate increases are limited to 5%. The lifetime increase is limited to 5%.
- There is a lower initial rate than most 30- or 15-year fixed rate loans while maintaining the security of a fixed rate for seven years. Monthly principal and interest payments will remain the same in the loan’s early years - a time when most people can least afford an increase.
Disadvantage:
If the worst-case scenario occurs (a maximum rate increase of 5% per year or a lifetime increase of 5%), it could mean significant changes to your monthly payment.
Tip:
When considering an adjustable-rate mortgage, calculate your monthly payment in the worst-case scenario. If this fits your budget and is an acceptable risk level, the ARM may save you money in the long run.
Mortgage details
| Loan purpose | Loan amount | Maximum loan-to-value | Mortgage insurance required | Terms (years) |
|---|---|---|---|---|
| Purchase | $0-$2,000,000 | 0.00%-80.00% | No | 15, 20, 25, 30 |
| Purchase | $0-$1,250,000 | 80.01%-85.00% | Yes | 15, 20, 25, 30 |
| Purchase | $0-$850,000 | 85.01%-90.00% | Yes | 15, 20, 25, 30 |
| Purchase | $0-$832,750 | 90.01%-95.00% | Yes | 15, 20, 25, 30 |
| No Cash-Out Refinance | $0-$2,000,000 | 0.00%-80.00% | No | 15, 20, 25, 30 |
| No Cash-Out Refinance | $0-$1,250,000 | 80.01%-85.00% | Yes | 15, 20, 25, 30 |
| No Cash-Out Refinance | $0-$850,000 | 85.01%-90.00% | Yes | 15, 20, 25, 30 |
| No Cash-Out Refinance | $0-$832,750 | 90.01%-95.00% | Yes | 15, 20, 25, 30 |
| Cash-Out Refinance | $0-$850,000 | 0.00%-75.00% | No | 15, 20, 25, 30 |
| Cash-Out Refinance | $0-$800,000 | 75.01%-80.00% | No | 15, 20, 25, 30 |
| Cash-Out Refinance | $0-$125,000 | 0.00%-70.00% | No | 15, 20, 25, 30 |
Displayed product information is valid for a one unit property only. For information on a property with more than one unit, please call 1-877-261-2820.