Fixed-Rate and Adjustable-Rate Mortgages

These are two of the most popular loan types for buying a home or refinancing your mortgage (including cash-out refinances). Both options are available for conventional conforming loan amounts, jumbo (non-conforming) loan amounts, and FHA or VA programs.

Fixed-Rate Mortgage

Features

  • Your interest rate and monthly principal and interest (P&I) payments remain the same for the life of your loan.
  • Available in a variety of loan term options.
  • You may be able to add extra features such as temporary buydowns.

Benefits

  • Predictable monthly P&I payments allow you to budget more easily.
  • Protection from rising interest rates for the life of the loan, no matter how high interest rates go.
  • May be a good choice if you plan to stay in your home for a long time.

Considerations

  • The overall interest you pay is higher on a longer-term loan than on a shorter-term loan.
  • On a shorter-term loan, the monthly P&I payment is typically higher than on a longer-term loan.

Adjustable-Rate Mortgage

Features

  • Your interest rate and monthly principal and interest (P&I) payments remain the same for an initial period of 5, 7, or 10 years, then adjust annually.
  • Loans available in a variety of longer terms.
  • Includes interest rate cap that set a limit on how high your interest rate can go.

Benefits

  • Typically ARMs have a lower initial interest rate than on a fixed-rate mortgage.
  • The interest rate cap limits the maximum amount your P&I payment may increase at each interest rate adjustment and over the life of the loan.
  • May provide flexibility if you expect future income growth or if you plan to move or refinance within a few years.

Considerations

  • Monthly principal and interest payments may increase when the interest rate adjusts.
  • Your monthly principal and interest payments may change every year after the initial fixed period is over.

Current Interest Rate Graph

   Talk to a local mortgage expert: Call (877) 275-1762 or email customer.support@phmloans.com

 

All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance. Licensed by the Delaware State Bank Commissioner. Also licensed in AL, CO, District of Columbia, FL, GA, IL, IN, KS, MD, MI, MN, MO, NC, PA, SC, TN, VA, WV and WI.
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