What is a 5/1 arm?

ARMs are denoted by how long your interest rate will remain fixed and how often your rate will adjust after the fixed period expires. So, with a 5/1 ARM, you get to hang onto that lower introductory interest rate (and monthly payments) for five years.

What is the difference between a 5/1 and a 3/1 arm?

In general, shorter term loans have lower interest rates. And that means that a 3/1 ARM will usually have a lower rate than a 5/1 one. And a 5/1 one will usually have a lower rate than a 7/1 one. By the time you get to a 10/1 ARM, its rate might not be much lower than one for a 30-year FRM.

What is a 5/1 arm mortgage?

In this article, we’ll be discussing the 5/1 ARM, which is an adjustable-rate mortgage with an initial rate lower than comparable fixed-rate mortgages for the first 5 years of your loan term. What Is A 5/1 ARM Loan? A 5/1 ARM is a type of adjustable rate mortgage loan (ARM) with a fixed interest rate for the first 5 years.