If you’re refinancing a home and want lower payments than a fixed rate mortgage may provide, consider an adjustable rate mortgage, or ARM, from PNC.
With an ARM, you’ll start out with a low rate and after a few years, your rate will reset with a new rate that can be either higher or lower depending on market conditions at the time the adjustment occurs. After the first rate adjustment, your interest rate can change on a regular basis until you pay off your mortgage.
- For homeowners with a good credit history
- Ideal if you’re expecting an increase in income, or don’t plan to own the home for a long period
- Adjustable rate loans are available in periods of 3, 5, 7, and 10 years during which the interest rate remains unchanged, followed by an adjustment period in which the interest rate may increase or decrease on an annual or semi-annual basis, dependent upon the product, resulting in a change in your monthly payment amount.
- Can be used for both primary and secondary homes, investment properties too
Is there a maximum interest rate for ARM?
Yes, adjustable rate mortgages have three rate caps that restrict how much your interest rate can change. One cap restricts the amount the interest rate can change at the first adjustment, the second restricts the amount the interest rate can change every adjustment period after the first adjustment period, and the third cap restricts the maximum interest rate you can pay for as long as you have the mortgage.
Notice Regarding Adjustable Rate Mortagages: Interest is fixed for a set period of time, and adjusts periodically thereafter. At the end of the fixed rate period, the interest and monthly payments may increase.