Loan program
Adjustable rate
A lower introductory rate that adjusts after a set period, useful when the timeline is clear.
Overview
What it is
An adjustable-rate mortgage (ARM) starts with a fixed interest rate for a set period (for example, 5, 7, or 10 years) and then adjusts periodically based on an index plus a margin, within caps.
ARMs can make sense when you have a realistic timeline: a job-related move, a planned sale, or a construction-to-permanent path. They are a poor fit if the only reason is “the payment looks smaller this year.”
Your Hancock officer should show the fully indexed rate, caps, and a worst-reasonable-case payment, not just the teaser.
Who it may be good for
- Buyers who expect to sell or refinance before the first adjustment and have a plan if they do not.
- Some jumbo or high-cost purchases where the ARM structure is the investor’s competitive offering.
How it works
- 01
You choose an initial fixed period and understand the index, margin, and caps in writing.
- 02
After the fixed period, the rate can move up or down at adjustment dates, within those caps.
- 03
You still get the same closing disclosures and consumer protections as a fixed-rate loan.
Potential advantages
- The introductory rate may be lower than a comparable fixed-rate loan.
- Can match a known short-to-medium holding period.
Things to consider
- Payments can rise. Caps limit the move; they do not freeze the payment forever.
- If you stay longer than planned, you need a refinance plan or a budget that survives adjustment.
- Never choose an ARM only because a website example payment looked attractive.
A defined window
An ARM is a timeline decision. It can fit if you will not need the same rate for thirty years.
Common questions
Questions about Adjustable rate loans
It depends on your timeline and risk tolerance, not on a market hot take. Compare a fixed-rate and an ARM with the same officer, including adjustment caps.
Ready when you are
The house is the point.
Whether you’re buying your first home, moving into your next one, refinancing, or exploring your options, we’re here to help you figure out the next step.