mortgage

What is a 5/1 ARM?

 

What is 5/1 ARM?

The Bankrate.com financial term of the day is: "5/1 ARM."

The term "5/1 ARM" might have you thinking of the very long limbs on a basketball player. Instead, it's a type of home loan, and one that can be a slam-dunk if you want to enjoy both the lower rates of an adjustable rate mortgage and some of the stability of a fixed. The 5/1 ARM offers a steady interest rate for the first five years. Then, the rate adjusts every one year, in line with a benchmark interest rate.

A 5/1 ARM is a hybrid mortgage loan that offers five years of a fixed rate and one-year adjustments after that.

To find a great rate on a home loan, visit the Mortgage section at Bankrate.com.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
 

A little research could save you BIG on interest.

Don't have time? Our rate-tracker tool saves you time and money. Delivered Thursdays.
 
advertisement
Partner Center
advertisement

Blog

Tara Baukus Mello

Chrysler recall for car ignition fix

The Chrysler Group has announced a recall of 349,442 cars for a potential problem that can cause the ignition key to become stuck or inadvertently move.  ... Read more


Connect with us