Factors_that_Affect_your_Mortgage_Rates.1With fixed rates currently in the low to mid 4’s, homeowners and lenders are looking at other options when it comes to financing. These Hyrbid or Fixed Rate Arms are in the low to mid 3’s, depending on how long the rate is fixed for. The 5 year fixed arm  is currently at 3.125%. For the responsible and diligent homeowner, this type of loan offers some degree of risk, but also a guaranteed savings when comparing to the 30 year fixed.  On this 5 Year fixed arm, the rate would only adjust after the 5th year, and then annually thereafter.

However, for most, the 5 years fixed isn’t enough time or is a bit too risky when thinking long term. The 10 Year Fixed ARM is a milder version and more of a middle ground between the 5 Year Arm and the 30 Year Fixed.

Currently, I have the 10 Year Fixed Arm @ 3.500% (Best Execution loan scenario). This rate is guaranteed for 10 years.

Savings Comparison: 30 Fixed vs. the 10 Year Fixed Arm

—The 10 year arm will save $171 monthly and the loan balance will be $8,065 lower at the 10 year mark. This is a guaranteed savings of $28,585 in 10 years.

Bottom Line:  If you are in the position where you don’t plan to keep your home or the mortgage for more than 10 years, this can be a great alternative.  

Please don’t hesitate to contact me if I can answer any questions or offer insight.

Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.