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Adjustable-Rate Mortgages

The Flexibility You Need Today

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An Adjustable-Rate Mortgage's (ARM) initial period will be fixed for the years specified, then the rate adjusts. Find the ARM that works best and gives you the flexibility you need today.

Adjustable-Rate Mortgage Options

Discover the flexibility of our ARM options. Get a lower interest rate than 30-year fixed mortgages today and choose the initial fixed period that that works for you: 5/6 ARM, 7/6 ARM, 10/6 ARM, and 15/15 ARM.

Better Rates Than
A 30‑Year Mortgage
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Lock-In Future
Monthly Payments
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No Balloon
Payment Features
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No Prepayment
Penalty
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Homebuyers interested in getting the lowest rate possible today and who plan on selling or refinancing in a few years may want to consider an adjustable-rate mortgage (ARM).

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Frequently Asked Questions

ARM stands for Adjustable-Rate Mortgage, which is a real estate mortgage loan with an interest rate that fluctuates over time. Here are some key points to understand about ARM products:

  • Tied to an Index: Variable rates are often linked to a benchmark interest rate or index, such as SOFR (Secured Overnight Financing Rate). When the index rate changes, the variable interest rate adjusts accordingly.
  • Adjustment Periods: The rate can change at specified intervals, known as adjustment periods. For example, in an ARM, the rate might adjust every six months or annually after an initial fixed-rate period, based on the terms established by your mortgage lender.
  • Caps and Floors: ARMs have caps (limits on how much the rate can increase,) and floors (limits on how much the rate can decrease.) These protect borrowers from extreme fluctuations.
  • Initial Fixed Period: Some ARMs start with a fixed interest rate for a set period before switching to a variable rate. This initial period can range from 3, 5, 6, or 10 years before the interest rate adjusts.
  • Potential for Lower Initial Rates: ARMs often start lower than Fixed-Rate Mortgages, which can make them attractive to borrowers. However, they carry the risk of increasing over time.
  • Impact on Payments: As the interest rate changes, the monthly payment amount can also change. If the rate goes up, payments typically increase. If the rate goes down, payments usually decrease. These adjustments to the rate and payment would only occur during the adjustment period as outlined in your mortgage note.

Fixed-Rate Mortgages (FRMs) keep the same interest rate throughout the life of the loan. The payments are predictable and do not change. Fixed-Rate Mortgages, however, usually have a higher rate or payment when compared to ARMs.

Both banks and credit unions offer ARMs and FRMs. They may be offered to consumers depending on their goals, risk tolerance and interest rate environment.

When deciding between an Adjustable-Rate Mortgage (ARM) and a Fixed-Rate Mortgage (FRM) one must look at their individual financial situation, risk tolerance and long-term plans to make the right decision. Here are some advantages and disadvantages of each, along with considerations about rate adjustments:

Benefits of Choosing an ARM

Benefits of Choosing an FRM

ARMs usually come with lower interest rates and payments during their initial fixed rate period.

FRMs are stable and predictable.

If interest rates decrease after the reset, the payment goes down.

Long-term option ideal for borrowers who plan to remain in their home for an extended period.

Suitable for borrowers who want a lower initial monthly payment for their starter home until they plan to sell or refinance.

Provide protection in a rising rate environment.

Consider these factors when weighing your options:

  1. How long do you intend to stay in the property? Are you looking for longer-term stable payment options (FRMs) or shorter-term benefits (ARMs?)
  2. Are you comfortable with potential future rate fluctuations?
  3. Do you expect your income to increase, which could help manage potential rate hikes?

We recommend working with your financial advisor to weigh options and make an informed decision that fits your budget and plans.

Owning a home may be one of the most important decisions you will make in your financial life. It is important to understand the terms clearly. Evaluate the best- and worst-case scenarios and the impact of rate adjustment on your personal finances. Check for prepayment penalties and look for a trusted lender and partner to help guide you.

Today's Rates

Earn up to

4.00% APY

Jumpstart Money Market

as low as

6.587% APR

30-Year Fixed Mortgage

Rates subject to change. APY= Annual Percentage Yield. APR= Annual Percentage Rate.
30 day lock Purchase. Click product for rates, terms & conditions.

Federally insured by NCUA. Applicant must meet membership and account qualifications. See www.traviscu.org/disclosures for complete details.

Rates as of 1/16/2025, 10:00 AM PT

Please note that rates and fees are subject to change without notice.

Adjustable Rate Mortgage (ARM) Disclosures
APR = Annual Percentage Rate. Rates are variable and effective as of current market conditions of 1/16/2025. The APR may increase after the original fixed-rate period. All loans are subject to approval. APR assumes a $300,000 loan amount with a credit score of 760 or higher for a purchase of an owner- occupied (primary residence), single-family dwelling in California with a loan-to-value ratio of 60% or less, on a 30-day rate lock pricing.

5/6 Adjustable Rate Mortgage (ARM) 30-Year
Based on current market conditions, monthly principal & interest payment would be $1,750.72 at a fixed initial interest rate of 5.750% (7.229% APR) for months 1-60, $2,101.98 for months 61-66, $2,170.10 for months 67-359, and $2,174.38 for month 360. Initial interest rate of 5.750% requires 0.160 discount points or $480.00. The adjusted payment example for months 61-360 is based on a fully capped interest rate of 8.125% (7.229% APR). The actual payment may be lower depending on the fully-indexed rate at the change date. The interest rate, APR, and payment can change after consummation and will be based on the current index value of the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin of 2.750%, rounded up to the nearest 0.125%, starting on the first change date on the 61st month, and subsequently every 6 months thereafter. The interest rate cannot increase or decrease more than 2.000% on the first change date, 1.000% at any subsequent change date thereafter. The interest rate cannot increase more than 5.000% over the life of the loan and cannot decrease below the margin.

7/6 Adjustable Rate Mortgage (ARM) 30-Year
Based on current market conditions, monthly principal & interest payment would be $1,774.61 at a fixed initial interest rate of 5.875% (7.023% APR) for months 1-84, $2,107.29 for months 85-90, $2,150.09 for months 91-359, and $2,148.10 for month 360. Initial interest rate of 5.875% requires 0.160% discount points or $480.00. The adjusted payment example for months 85-360 is based on a fully capped interest rate of 8.125% (7.023% APR). The actual payment may be lower depending on the fully-indexed rate at the change date. The interest rate, APR, and payment can change after consummation and will be based on the current index value of the 30-day Average Secured Overnight Financing Overnight Rate (SOFR) plus a margin of 2.750%, rounded up to the nearest 0.125%, starting on the first change date on the 85th month, and subsequently every 6 months thereafter. The interest rate cannot increase or decrease more than 2.000% on the first change date, 1.000% at any subsequent change date thereafter. The interest rate cannot increase more than 5.000% over the life of the loan and cannot decrease below the margin.

10/6 Adjustable Rate Mortgage (ARM) 30-Year
Based on current market conditions, monthly principal & interest payment would be $1,798.65 at a fixed initial interest rate of 6.000% (6.794% APR) for months 1-120, $2,099.94 for months 121-126, $2,119.18 for months 127-359, and $2,119.60 for month 360. Initial interest rate of 6.000% requires 0.160% discount points or $480.00. The adjusted payment example for months 121-360 is based on a fully capped interest rate of 8.125% (6.794% APR). The actual payment may be lower depending on the fully-indexed rate at the change date. The interest rate, APR, and payment can change after consummation and will be based on the current index value of the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin of 2.750%, rounded up to the nearest 0.125%, starting on the first change date on the 121st month, and subsequently every 6 months thereafter. The interest rate cannot increase or decrease more than 2.000% on the first change date, 1.000% at any subsequent change date thereafter. The interest rate cannot increase more than 5.000% over the life of the loan and cannot decrease below the margin.

15/15 Adjustable Rate Mortgage (ARM) 30-Year
Based on current market conditions, monthly principal & interest payment would be $1,822.83 at a fixed initial interest rate of 6.125% (5.673% APR) for months 1-180, $1,479.87 for months 181-359, and $1,480.46 for month 360. Initial interest rate of 6.125% requires 0.160% discount points or $480.00. The adjusted payment example for months 181-360 is based on a fully capped interest rate of 3.000% (5.673% APR). The actual payment may be lower depending on the fully-indexed rate at the change date. The interest rate, APR, and payment can change after consummation and will be based on the current index value of the weekly 10-year U.S. Treasury Average, plus a margin of 1.310%, rounded up to the nearest 0.125%, starting on the change date on the 181st month. The interest rate cannot increase more than 6.000% over the life of the loan and cannot decrease below the 3.000% floor rate.

Additional Disclosure for all ARM Products
Payment example(s) does not include taxes and insurance. Property insurance required. If an impound account for taxes and insurance is desired, you are responsible for those set-up amounts and any charges assessed by your current lender such as reconveyance fees, payoff demand fees, prepayment penalties and any interim interest collected at closing. Your rate may vary based on your creditworthiness, loan amount, purpose, LTV, lock period, and other credit characteristics. All rates and terms are subject to change without notice. Hazard and flood insurance may be required depending on the subject property and location. Other restrictions may apply. No rate is guaranteed without a valid rate lock. A point is equal to 1% of the loan amount’s balance. Private mortgage insurance (PMI) is required on mortgages that exceed 80% loan-to-value (LTV). Rate and payment examples are not a commitment to lend. Contact a Travis Credit Union Mortgage Loan Officer for further details. Other terms and conditions may apply.

Equal Housing Opportunity, NMLS #643926.