Adjustable Rate Mortgage
Find adjustable rate mortgage options that support your financial needs
If you’re looking to stay in your new home for a short period of time, an adjustable rate mortgage (ARM)* may be a smart choice for your financial situation. The interest rates on ARM loans are typically lower than other mortgage types for the first few months to first few years of the loan, depending on the terms.
At Nationwide Bank®, we want to help you pay less on what you borrow through conventional adjustable rate mortgages designed to suit your specific needs.
With an adjustable rate mortgage, you have set adjustment periods in which the interest rate may increase or decrease, depending on current market conditions. Rate caps are put in place when finalizing your ARM loan, so that the interest rate can never increase or decrease by more than the determined percentage over a pre-disclosed period of time. Once your adjustable rate mortgage loan’s introductory period ends, your interest rate adjusts and monthly payments may increase. It may become more difficult to predict your payment amount, especially if market rates continue to rise.
It’s important to understand the terms of your ARM loan and consider how to comfortably budget for increases in your monthly payments once your introductory period is over, so you are at ease with your decision.
Start saving with an adjustable rate mortgage. Begin your ARM loan application today!
Attractive adjustable rate mortgage interest rates to fit your budget
At Nationwide Bank, we offer attractive rates on ARM loans to help reduce your monthly loan payments.
Check out our great ARM rates to see how they work with your budget!
Learn more about ARM loans and other mortgage types
Not sure if an adjustable rate mortgage is right for you and considering a fixed rate mortgage instead? What about a jumbo mortgage if you’re purchasing a more expensive property?
It’s important to understand the different loan options available and find which one best fits your financial situation. Making smarter decisions with your money is easy with the traditional mortgage options available to you through Nationwide Bank.
For additional information or to complete an adjustable mortgage loan application by phone, contact Find answers to your questions about adjustable rate mortgages and other types of mortgage loans:
For additional information or to complete an adjustable mortgage loan application by phone, contact a Nationwide Bank Mortgage Representative at 1-877-636-0598.
*For an Adjustable Rate Mortgage (ARM) loan, the interest rate is not fixed and may increase after consummation according to a formula – typically, a base interest rate (index) plus a certain percent (the margin). However, the initial interest rate may not be based on the index used for later adjustment. Future increases/decreases in your interest rate will be limited by terms of the note which will include limits on the first interest rate adjustment, subsequent interest rate adjustments, and lifetime interest rate adjustments. At the end of the first adjustment period, your interest rate may increase significantly even if the index value stays constant. So, be prepared to pay a larger payment once the initial fixed period is over to prevent what is sometimes called “payment shock”. Your interest rate and monthly payment could possibly increase even more throughout the duration of your loan if market rates rise and the index value increases. All of our ARMs have a term of 30 years and an initial fixed interest rate period of at least 3 years. Your interest rate may increase no more than 6% above the original interest rate (for some programs, the maximum increase is 5%) over the term of the loan. We offer ARMs with initial periods of 3, 5, 7, and 10 years. For ARMs with an initial period of 3 years, interest rate increases are limited to 2% for the first and subsequent adjustment.
Be sure you understand the terms of the ARM loan you are applying for and are financially able to handle increases in your payment once the initial introductory period is over. The following chart compares a fixed rate mortgage to a discounted 3/1 ARM and illustrates the effect of rate increases on the payments. The illustration is based on a loan amount of $200,000 with a term of 30 years:
|
Fixed Rate Mortgage 7.5% APR** |
Discounted 3/1 ARM 7% APR for 3 yrs then adjusting to variable rate in year 4 9% maximum in year 4 11% maximum in year 5 13% maximum in year 6-30 |
|
|---|---|---|
|
Required Monthly Payments (includes $200 per month for real estate tax and insurance escrow) |
||
| Years 1-3 | $1,598 | $1,531 |
| Year 4 - maximum 2 % increase | $1,598 | $1,792 |
| Year 5 - maximum 2% increase | $1,598 | $2,075 |
| Year 6 - maximum 2% increase | $1,598 | $2,346 |
Consider an ARM loan if:
- You expect to live in a home for a short period of time respective to the term of your ARM
- You're prepared to handle an increase in payments once the introductory period ends
For detailed information on how ARMs work, review the Consumer Handbook on Adjustable Rate Mortgage which is a joint publication of the Federal Reserve Board and the Office of Thrift Supervision.
Contact Nationwide Bank®
Mortgages
1-877-636-0598
Live customer care
Monday – Friday
8 a.m. – 9 p.m. ET
Service for Existing Customers
1-800-356-3442
Live customer care
Monday – Friday
9 a.m. – 5:30 p.m. ET
Bank by phone 24/7
