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Adjustable-Rate Mortgage & Rates

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Monthly payments that may change periodically

Refinancing to an adjustable-rate mortgage (ARM) typically provides a lower interest rate for an initial payment period, making the initial monthly payments less than what a fixed-rate mortgage refinance usually offers. However, your interest rate may change periodically depending on changes in a corresponding financial index that's associated with the loan. Generally speaking, your monthly payment will increase or decrease if the index rate goes up or down.

ARM loans are usually named by the length of time the interest rate remains fixed and how often the interest rate is subject to adjustment thereafter. For example, in a 5/1 ARM, the 5 stands for an initial 5-year period during which the interest rate remains fixed while the 1 shows that the interest rate is subject to adjustment once per year thereafter.

Refinancing to an adjustable-rate mortgage is a good choice if you:

  • Plan to move before the end of the introductory fixed-rate period, so you aren't concerned about possible rate increases
  • Want an initial monthly payment lower than a fixed-rate mortgage usually offers
  • Think interest rates may go down in the future

Today's low ratesToday's low rates for adjustable-rate refinance loans

Rates based on a ${{{loanAmount}}} loan in ZIP code {{{zipCode}}} | Change ZIP code layer

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Rate X.XXX%

APR X.XXX%

Points X.XXX

Monthly Payment $XXXX

Rate X.XXX%

APR X.XXX%

Points X.XXX

Monthly Payment $XXXX

Rate X.XXX%

APR X.XXX%

Points X.XXX

Monthly Payment $XXXX

Refinance rates valid as of date/time and assume borrower has excellent credit (including a credit score of 740 or higher). Estimated monthly payments shown include principal and interest only. ARM interest rates and payments are subject to increase after the initial fixed-rate period (5 years for a 5/1 ARM, 7 years for a 7/1 ARM and 10 years for a 10/1 ARM). Select the About ARM rates link for important information, including estimated payments and rate adjustments.

10/1 ARM Variable X.XXX%

7/1 ARM Variable X.XXX%

5/1 ARM Variable X.XXX%

10/1 ARM Variable X.XXX%

7/1 ARM Variable X.XXX%

5/1 ARM Variable X.XXX%

10/1 ARM Variable X.XXX

7/1 ARM Variable X.XXX

5/1 ARM Variable X.XXX

10/1 ARM Variable $XXXX

7/1 ARM Variable $XXXX

5/1 ARM Variable $XXXX

Refinance rates valid as of date/time and assume borrower has excellent credit (including a credit score of 740 or higher). Estimated monthly payments shown include principal and interest only. ARM interest rates and payments are subject to increase after the initial fixed-rate period (5 years for a 5/1 ARM, 7 years for a 7/1 ARM and 10 years for a 10/1 ARM). Select the About ARM rates link for important information, including estimated payments and rate adjustments.

Rate

The rate of interest on a loan, expressed as a percentage.

Annual percentage rate (APR)

The annual cost of a loan to a borrower. Like an interest rate, an APR is expressed as a percentage. Unlike an interest rate, however, it includes other charges or fees (such as mortgage insurance, most closing costs, points and loan origination fees) to reflect the total cost of the loan.

Points

An amount paid to the lender, typically at closing, in order to lower the interest rate. Also known as mortgage points or discount points. One point equals one percent of the loan amount (for example, 2 points on a $100,000 mortgage would equal $2,000).

Estimated monthly payments

The estimated monthly payment includes principal, interest and any required mortgage insurance (for borrowers with less than a 20% down payment). The payment shown here does not include amounts for hazard insurance or property taxes, which will result in a higher actual monthly payment. After the initial fixed-rate period, the interest rate can increase or decrease annually based on the then-current London Interbank Offered Rate (LIBOR) index, which will impact your monthly payment.

Fixed-rate mortgage

A home loan with an interest rate that remains the same for the entire term of the loan.

Adjustable-rate mortgage (ARM)

Also called a variable-rate mortgage, an adjustable-rate mortgage has an interest rate that may change periodically during the life of the loan in accordance with changes in an index such as the U.S. Prime Rate or the London Interbank Offered Rate (LIBOR). Bank of America ARMs use LIBOR as the basis for ARM interest rate adjustments.

Your monthly payment may fluctuate as the result of any interest rate changes, and a lender may charge a lower interest rate for an initial portion of the loan term. Most ARMs have a rate cap that limits the amount of interest rate change allowed during both the adjustment period (the time between interest rate recalculations) and the life of the loan.

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Our experienced lending specialists are ready to help you with your financing needs:

Other types of refinance loans

Fixed-rate refinance loans

  • Your interest rate remains the same for the entire loan term

  • Your monthly payment of principal and interest does not change during the loan term

FHA & VA refinance loans

  • Government loans from the Federal Housing Administration and the U.S. Department of Veterans Affairs

  • More flexible qualification guidelines than conventional loans

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Refinance basics

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