APPLY FOR AN ADJUSTABLE-RATE MORTGAGE

The initial interest rate of an adjustable-rate mortgage is typically lower than a fixed-rate loan, and will likely go up over the life of the loan. It’s especially attractive to first-time homebuyers who plan to own their property for just a few years, as well as those who are expecting their income to grow.

Adjustable-rate mortgage interest rates are tied to an index and adjusted at regular intervals. As market conditions change, your interest rate may go up or down.

Who is best suited to this type of loan?

• Those who plan to sell or refinance within a few years of purchase.
  What’s the advantage? You get the adjustable-rate mortgage’s low initial rate, but if you do plan to move, you may do so before the rate goes up.
• Those who buy a home when mortgage rates are high.
  An adjustable-rate mortgage can make the first few years of your mortgage more affordable.
• Those who expect household incomes to increase.
  The initial low rate can be a budget saver. Then when rates increase, your anticipated increased income may help accommodate that.

With an adjustable-rate mortgage, you'll enjoy those lower initial interest rates and receive rate protection up to a full 10 years. Plus, you have the option of converting to a fixed-rate mortgage down the road.

Be sure to consider how long the initial rate will be in effect—and when you should expect interest rate increases to occur when deciding which mortgage is right for you.