Home » Loans » Mortgage » Adjustable-Rate Mortgage (ARM)

How to Get an Adjustable-Rate Mortgage (ARM)

What it is

An adjustable-rate mortgage, also called ARM or a variable rate mortgage, is when the interest rate on the loan is periodically adjusted based upon the economic index. The payments made by the borrower change over time with the changing interest rate. This is not a graduated payment mortgage, which offers changing payment amount on a fixed interest rate. Adjustable-rate mortgages transfer part of the interest rate risk from the lender to the borrower. They can be used when unpredictable interest rates make fixed-rate loans impractical or difficult to obtain. The borrower benefits if the interest rate falls and loses out if the interest rate rises.

Adjustable-rate mortgages offer the ability to repay principal or capital early without penalty. Early payments of part of the principal will reduce the total cost of the loan and will shorten the amount of time needed to pay off the loan. Early payoff of the entire loan amount is often done when interest rates drop significantly.

Who it's for

Adjustable-rate mortgages are for people who want to be able to take advantage of decreasing interest rates. Adjustable-rate mortgages offer people more affordability when it comes to mortgage financing. The initial interest rate for an adjustable-rate mortgage is lower than that of a fixed-rate mortgage, where the interest rate remains the same during the life of the loan. A lower rate means lower payments, which might help you qualify for a larger loan.

What you need to do to apply

In order to obtain an adjustable-rate mortgage, interested applicants will need to contact a local lending institution and inquire about the different options and rates available. Personal and financial history, including a credit report, will need to be made available to the lending institution. A property appraisal may also be required.

Apply for an Adjustable-Rate Mortgage (ARM)

Popular Credit Cards

Recommended Credit Card

The Platinum Card® from American Express

The The Platinum Card® from American Express is one of the most popular cards available. Your Credit Advisor recommends it as our favorite in this category.

The Platinum Card® from American Express

Apply for The Platinum Card® from American Express
  • Earn 25,000 Membership Rewards? bonus points when you spend $1,000 in your first 3 months of Card membership - redeemable for one domestic round-trip Coach-Class airline ticket!
  • Airport Club Access: Access airport lounges around the world, compliments of Airport Club Access Program.
  • 24-Hour Concierge Service: From buying gifts to making reservations, the Platinum Card? Concierge is at your service so you can spend your energy doing what you want.
  • FINE HOTELS & RESORTS: Receive special amenities and comforts when staying at more than 600 boutique, resort and luxury hotels around the world.
  • Apply online now at American Express's Web site.
Intro APR Regular APR Credit Needed Annual Fee
No Introductory Rate Available No APR Very Good $450

Citi® Platinum Select® MasterCard®

Citi® Platinum Select® MasterCard®

Apply for Citi® Platinum Select® MasterCard®
  • 0% Intro APR on balance transfers for 18 months and 0% Intro APR on purchases for 12 months. After that, the APR will be 11.99%-19.99% based upon your creditworthiness. This APR will vary with the market based on the Prime Rate*
  • Extra Cash from Citi: enjoy discounts on gift cards, travel, merchandise and more
  • Citi® Identity Theft Solutions
  • Secure, free online account management
  • No annual fee*
  • Read our review or apply online now at Citibank's Web site.
Intro APR Regular APR Credit Needed Annual Fee
0% Intro APR* 11.99% - 19.99%* (Variable) Very Good $0*

Starwood Preferred Guest® Credit Card from American Express

Starwood Preferred Guest® Credit Card from American Express

Apply for Starwood Preferred Guest® Credit Card from American Express
  • Earn up to 25,000 Starpoints (R) - enough for up to 6 free nights at a category 1 or 2 hotel
  • Use Starpoints(R) for free nights and upgrades at participating Starwood hotels and resorts in 95 countries including Sheraton, W Hotels, Westin and more with no blackout dates
  • No annual fee for the first year and $45 thereafter
  • Transfer Starpoints(R) - almost always on a 1:1 basis - to the frequent flyer programs of over 30 major airlines
  • Earn one Starpoint(R) for every dollar you spend and double Starpoints(R) at participating Starwood properties and retail partners
  • Express Approval. Get a decision in less than 60 seconds
  • Smarter Travel Editor's Choice Award for Best Travel Awards Card for Domestic Use
  • Read our review or apply online now at American Express's Web site.
Intro APR Regular APR Credit Needed Annual Fee
2.90% on Purchases and Balance Transfers for 6 months 15.24% variable Very Good $45**

IberiaBank Visa® Classic Card

IberiaBank Visa® Classic Card

Apply for IberiaBank Visa® Classic Card
  • No Annual Membership Fee
  • Low variable rate of 7.25%, 10.25%, or 13.25% (Prime + 4.00%, Prime + 7.00%, or Prime + 10.00%) as of 4/1/10 based on the creditworthiness. This APR will vary with the market based on the Prime Rate. (If there is an interest charge, the charge will be no less than $1.00).
  • Low Introductory APR on balance transfers of 1.99% for your first 6 billing cycles, this rate will not change during the introductory period. Applies to balance transfers processed within three months of your account open date. After that, your APR will be the same as your assigned purchase rate, based on your creditworthiness.
  • Online Access to Credit Card Account Information
  • Apply online now at the card issuer's Web site.
Intro APR Regular APR Credit Needed Annual Fee
1.99% APR for 6 Months 7.25%, 10.25%, or 13.25%* None $0

American Express® Gold Card

American Express® Gold Card

Apply for American Express® Gold Card
  • Earn 10,000 Membership Rewards(R) bonus points when you spend $500 in 3 months - redeemable for a $100 gift card!
  • The Membership Rewards program - Turn your everyday purchases into Membership Rewards points, and then redeem them for an amazing collection of travel, shopping, dining and entertainment rewards.
  • Gold Card Events - exclusive access to tickets for select concerts, shows, major sporting events, and more in cities nationwide.
  • Express Approval. Get a decision in less than 60 seconds.
  • Read our review or apply online now at American Express's Web site.
Intro APR Regular APR Credit Needed Annual Fee
No Introductory Rate Available No APR Good $125