Option ARM vs. Fixed Rate Mortgage

A fixed rate mortgage has the same payment for the entire term of the loan. The Option ARM uses a low initial rate to calculate your intial minimum monthly payment. Although the interest rate will increase after 1 to 3 months, your low payment will remain fixed for the entire year. This can produce a much lower monthly payment than a traditional fixed rate mortgage, or even an adjustable rate mortgage (ARM).

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In using the loan calculators, please keep in mind that the results of any loan calculator computation are not intended to be and should not be considered a decision of, or a commitment to, the loan type, rate, closing fees, or amount for which you may qualify. It is not a commitment to lend or a lock of any loan terms or costs. All programs, rates and fees are subject to change without notice.