Adjustable-rate refinance mortgages provide initially lower monthly payments

Refinancing your home may be a good financial decision for you if the savings you realize will compensate for the refinancing costs. HomeTrust Bank’s expert mortgage lenders can explain today’s refinance loans clearly and simply to help you select one that best suits your financial situation.

Refinancing with an adjustable-rate mortgage, also called an ARM loan, can help you with lower interest rates in the short term. Initial payments are lower during the fixed-rate period so you can use the savings to invest in other things. These types of loans are a good idea if you plan to move before the fixed-rate period ends or if you are expecting an increase in income.

Refinancing with an ARM

Adjustable-rate mortgages from HomeTrust Bank differ from fixed-rate mortgages because the interest rate and monthly payment move up and down with fluctuating market rates.

  • If interest rates fall, your ARM rates and payments fall too. Similarly, if interest rates rise, your ARM rate and payment could rise too.
  • ARMs are named with two numbers. The first number represents the initial fixed rate period for the loan. In the case of a 5/1 ARM, the initial fixed rate period is 5 years. The second number represents how often the interest rate can be adjusted after the initial fixed rate period.
  • HomeTrust Bank offers 5-year, 7-year, and 10-year ARMs, all with a 30-year repayment period. Check rates and calculate your payments here.

Considerations

  • ARMs can be complex to understand due to their flexibility.
  • Over the loan’s full term, payments and rates can change significantly. However, there are caps that limit the rate changes you can expect when the fixed period ends, and on how much the rate can change each year.
  • Once the fixed-rate period expires, your interest rate may change annually as outlined in your closing disclosures.

Let our mortgage experts help you refinance now!