Adjustable Rate Mortgages

Lock in a low fixed rate for the first part of your loan. Then enjoy a competitive variable rate thereafter.

With an adjustable rate mortgage (ARM) from ALEC, you can take advantage of a predictable fixed rate for a specified term at the beginning of your loan. This can free up more cash you can save, or use to improve your home.

ARMs are a popular loan choice with buyers who think there’s a good chance they may sell their home within the initial fixed-rate period, when the rate is often its lowest.

After the initial fixed-rate period, you’ll pay a variable rate that is tied to a specific financial index plus a margin, and is annually adjusted.

Examples of ALEC adjustable rate loans:

5/1 ARM LIBOR

After the initial 5-year fixed-rate period, the first rate adjustment, based on the Libor index, could increase up to 2% or decline up to 2%. In subsequent years, the rate can only adjust up or down a maximum of 2% annually. The lifetime cap of the loan cannot vary more than 6% from the initial rate. The loan rate will never fall below the 2.25% margin.

7/1 ARM LIBOR

After the initial 7-year fixed-rate period, the first rate adjustment, based on the Libor index, could increase up to 5% or decline up to 5%. In subsequent years, the rate can only adjust up or down a maximum of 2% annually. The lifetime cap of the loan cannot vary more than 5% from the initial rate. The loan rate will never fall below the 2.25% margin.

Features of ALEC Adjustable Rate Mortgages:

• Low fixed rate for the initial term, then becomes a variable rate that adjusts periodically for the remainder of the term
• Fixed-period ARMs of 3, 5, 7 and 10 years
• No prepayment penalties
• Jumbo ARMs available

Ready to buy a home?

ALEC makes it easy to apply for a mortgage loan.* You can visit an ALEC Service Center or contact a Mortgage Loan Representative.