When Does a 10 Year ARM Make Sense?

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Not sure is a 10 year adjustable rate mortgage makes sense for you? Check out some of the information on this page to start your research.

While current 10/1 ARM rates are not represented in the survey featured on PriceAMortgage.com, most of the lenders and brokers listed still offer this product. Bankrate.com, the company that puts the survey together, simply limits the number of mortgage programs posted for ease of use. With a 10 year adjustable rate mortgage, the rate stays fixed for the first ten years of the loan before adjusting up or down for the remaining years of the mortgage (most have a 30 year amortization). When fixed mortgage rates are low, there may be little benefit to a 10 year ARM as rates for these products may be the same or even higher than fixed rates. However, there are times when 10/1 ARM rates are considerably lower than that of a 30 year fixed rate mortgage making this long term ARM product appealing.

The biggest questions you need to ask yourself are:

1. Do you envision being in the home for more than 10-12 years?

2. Is the rate that much lower than current 30,20, or 15 year pricing that it makes it worth the interest rate risk of an ARM?

3. Are you in a financial position where you can afford higher payments if for some reason you are unable to refinance out of the ARM after the 10 years pass?

Discussing 10 Year Adjustable Mortgage Rates and Closing Costs with a Lender or Broker

Ask your mortgage professional to go through the pros and cons or 10 year adjustable rate mortgage products.

  • Introductory rate is fixed for the first 120 months of the loan prior to its first rate adjustment.
  • At certain times, 10 year ARM rates can be appealing when fixed rate mortgages are higher.
  • Caps, Margins, and Indexes will vary by product and investor. Be sure to ask a mortgage professional for details.

Check today’s mortgage rates from competing companies for a variety of programs using the rate table below: