Are Adjustable-Rate Mortgages (ARMs) Making a Comeback?

Let’s face it—mortgage rates have been all over the place lately, and if you’ve been shopping for a home loan, you’ve probably heard about Adjustable-Rate Mortgages (ARMs). These aren’t the same old ARMs your parents warned you about. In fact, they’re making a serious comeback.

So, what’s the deal with ARMs? Are they worth considering? Let’s break it down.

What’s an ARM, Anyway?

An Adjustable-Rate Mortgage (ARM) starts with a low, fixed interest rate for a set number of years—usually 5, 7, or 10. After that, the rate adjusts periodically based on the market.

Think of it like an intro deal at your favorite streaming service: great rates upfront, but the cost could change later.

Why Are ARMs Trending Again?

With fixed mortgage rates climbing, ARMs are looking like an affordable option for many buyers. Lower initial payments mean you can save money now, which is a big deal when home prices are higher than ever.

Plus, if you’re planning to move or refinance before the adjustable period kicks in, an ARM might make a lot of sense.

What’s Good About ARMs?

• Lower Initial Payments: You’ll pay less during the fixed-rate period compared to a traditional fixed-rate mortgage.
• More Buying Power: Lower payments mean you might qualify for a higher loan amount.
• Great for Short-Term Plans: If you’re not staying in the home long, you could save big.

What’s the Catch?

• Future Payments Can Increase: When the fixed period ends, your rate can adjust up or down, which means your monthly payment could change.
• Uncertainty: If you’re in it for the long haul, an ARM might not be the best fit unless you’re prepared for potential rate hikes.

Is an ARM Right for You?

An ARM might be a great fit if:

• You plan to sell or refinance before the adjustable period starts.
• You expect your income to grow in the next few years.
• You’re looking for lower payments now and are okay with future uncertainty.

If you want predictable payments or plan to stay in your home for the long term, a fixed-rate mortgage could be the better option.

Let’s Chat About Your Options

Adjustable-Rate Mortgages are back in the game for a reason—they can save you money and open doors to homeownership when fixed rates feel too high. But they’re not for everyone, and that’s where I come in.

Let’s figure out if an ARM makes sense for your situation. Schedule a quick chat with us at RCG Mortgage, and I’ll help you weigh the pros and cons so you can feel confident about your choice.