ARM now, refinance later?

An adjustable-rate mortgage (ARM) usually starts with a lower rate than a 30-year fixed. If you think rates will come down, you could take the ARM now, enjoy the lower payment, and refinance into a fixed rate later. Here's what that could look like, including what happens if rates don't fall.

These numbers are estimates only and may not be accurate. They depend on your real interest rate, credit, income and the home's actual taxes and insurance. Contact us for accurate figures; it's free and there's no obligation. The starting interest rate (6.5%) is an example only, not a quote: your rate depends on your credit, loan type, down payment and the market, and can be higher or lower. Change it to see the difference.

Today's choice

Loan amount ($)

30-year fixed rate today (%)

ARM starting rate (%)

ARM fixed for the first

ARM lifetime cap (%) most it can rise in total

Your refinance plan

Refinance after (years) within the fixed years

Fixed rate you hope to get then (%) a guess, not a forecast

Refinance costs (% of loan)

Compare over (years)

The ARM saves you, until you refinance

—

Fixed-rate payment (principal & interest)
ARM payment for now
Saved in the first
Estimated refinance cost
If you keep the ARM: highest possible rate

Compared with fixing today, over

If at refinance time…	New payment	vs fixed today

Compares everything you'd pay over , plus the loan left at the end, for both plans. Refinance costs are added to the new loan. Estimates only.

Estimates only. Contact us for accurate figures: free, no obligation.

Your full name

Mobile phone

Why people choose this

A lower payment from day one, which can help you qualify or save more.
If rates fall, you can switch to a fixed rate and lock in the lower rate.
If you move or sell within the fixed years, you may never see an adjustment.

What to watch

Nobody knows where rates will go. Plan for rates not falling.
To refinance you must qualify again, and your home must appraise.
Refinancing costs money, so a small rate drop may not be worth it.
Check you could afford the worst-case payment if you keep the ARM.

ARM vs fixed: rates fall, stay or rise How ARMs work Refinance calculator

Common questions

Can I get an ARM now and refinance later?

Yes. Many people take an ARM for its lower starting rate and plan to refinance into a fixed rate if rates fall. It is not guaranteed: rates may not fall, and you must qualify again (income, credit and home value) when you refinance.

What does it cost to refinance?

Often around 2% to 5% of the loan, including Florida mortgage taxes, title and lender fees. Some costs can be rolled into the new loan. The calculator lets you set your own figure.

What if rates go up instead?

You can keep the ARM. Its rate stays fixed for the first years, then can change within its caps. The calculator shows the worst case, so you know the highest it could go.

For education and planning only. Approximate estimates; not legal, tax or financial advice. Not a loan offer, approval or commitment to lend. Example rates are for illustration only; rates can change and may not be available at commitment or closing. Rates, terms, taxes, insurance and program rules vary and change; your actual numbers may differ. Mortgage services by Bill McElhill, NMLS #2176490, licensed in Florida, Georgia and Texas.