What’S A 5/1 Arm Loan  · You may see an ARM described with figures such as 1/1, 3/1, and 5/1. The first figure in each set refers to the initial period of the loan, during which your interest rate will stay the same as it was on the day you signed your loan papers.

When you get a mortgage, there are many loan features to consider. One of the key decisions is whether to go with a fixed- or adjustable-rate mortgage.

What Is A 5/1 Adjustable Rate Mortgage How a 5/1 ARM Mortgage Works. The term 5/1 arm means that you will get five years of a fixed interest rate, followed by one-year increments of adjustable rates. This means that for the first five years of the mortgage, you are going to have the same interest rate and the same monthly mortgage payment.

Adjustable-rate mortgages, or ARMs, may be coming back into style. If interest rates rise as they are expected to, ARMs, also sometimes called variable-rate or floating-rate mortgages, may become more.

Adjustable-rate mortgages offer a fixed rate for an introductory period-typically for five, seven or 10 years-before the rate changes based on an index that it tracks, such as LIBOR. How often an ARM’s rate adjusts depends on the loan’s parameters.

Many homeowners shunned adjustable-rate mortgages, often called ARMs, during and after the recession, but according to an analysis from the trade publication Inside Mortgage Finance, the number of adjustable-rate mortgage originations shot up more than 40 percent from the first quarter of this year to the second, which was a major jump even accounting for seasonality.

Should you refinance your ARM to a fixed rate mortgage? Find out the advantages of refinancing an adjustable rate mortgage. afterward, shop around and comparison shop available mortgage refinancing offers at LendingTree.

Why You Should Consider an adjustable-rate mortgage. adjustable-rate mortgages, or ARMs, may be coming back into style. If interest rates rise as they are expected to, ARMs, also sometimes called variable-rate or floating-rate mortgages, may become more popular among both homebuyers and homeowners who missed fixed-rates at their record low.

5/1 ARM Refinance Rates. NerdWallet’s mortgage comparison tool can help you compare 5/1 ARMs and choose the one that works best for you. Just enter some information and you’ll get customized.

What's the difference between fixed or adjustable mortgage rates and how. This rate can vary according to the type of loan program you choose and. to understand for new borrowers and can make it easier to consider your.

Given that 15-and 30-year fixed mortgage rates are at a historic low, why even consider an ARM? If you’re aiming to pay off your mortgage in a short period you can still save a bundle, says Clifford.

When to Consider an Adjustable Rate Mortgage (ARM). a higher loan amount than with a 30-year fixed rate mortgage. This allows buyers to consider a wider range of homes-possibly those in more.