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

Check credit before auto loan

The news that an auto finance company distorted consumer credit records for years is a good reminder to check your credit report regularly.  ... Read more


Connect with us