An Adjustable Rate Mortgage. Fixed First. Adjustable Later.
An ARM holds a fixed payment for an opening stretch of years, then adjusts on a schedule with limits on how far it can move.*
Fixed for a while, not forever.
The number in front is how many years the rate stays put. The six is how often it can move afterwards.
- Fixed for the opening period, then adjusts every six months
- Caps limit the first move, each later move, and the lifetime move*
- Indexed to SOFR
- 3/6 structures are rare, one program offers them
- Available on conventional, government and non-QM programs*
- Qualifying is done against a stress rate on shorter structures*
Structures available: 5/6, 7/6 and 10/6 SOFR ARMs*
The rate is fixed for the opening period, then adjusts every six months
Caps limit the first adjustment, each later one, and the lifetime move*
Qualifying rules differ by structure, and a shorter fixed period is qualified more conservatively*
3/6 SOFR ARMs are offered by at least one program
Available on conventional, government and non-QM programs*
What is the Saxton Adjustable Rate Loan?
A fixed opening period, then a rate that moves on a schedule with limits
An adjustable rate mortgage is fixed for the opening period named in the product, then adjusts every six months against the SOFR index. A 5/6 is fixed for five years, a 7/6 for seven, a 10/6 for ten.
Two things decide whether an ARM is sensible: how long you expect to hold the loan, and how the caps are written. If your horizon is shorter than the fixed period, the structure is doing exactly what it was designed to do.
What makes it a structure rather than a gamble is the caps. There is a limit on how far the rate can move at the first adjustment, a limit on each adjustment after that, and a ceiling across the life of the loan. Those limits are written into the note before you sign it.*
Why choose the Saxton Adjustable Rate Loan?
Built for borrowers whose horizon is shorter than the loan, and who would rather not pay for years they will not use.
A Known Horizon
If you expect to sell or refinance inside the fixed period, you are paying for protection you will never use.
The Caps Are The Point
Each adjustment is bounded, and so is the lifetime move. The worst case is knowable before you sign rather than after.*
Qualified Conservatively
A shorter fixed period is underwritten against a stress rate rather than the opening one, so approval does not depend on the rate staying low.*
Ten Years Is A Long Time
A 10/6 is fixed for a decade. Most borrowers do not keep a mortgage that long, which is what makes the longer structures worth a look.
Not Only Conventional
Adjustable structures exist on government and non-QM programs too, not only on agency financing.*
Some States Differ
A handful of states apply stricter qualifying rules to the longer structures. Where you buy can change how the file is underwritten.*
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about adjustable rate mortgages.
The first is how many years the rate is fixed. The second is how often it can adjust after that. A 7/6 is fixed for seven years, then adjusts every six months.
Caps. There is a limit on how far the rate can move at the first adjustment, a separate limit on each adjustment after it, and a ceiling for the life of the loan. All three are in the note before you sign.*
On the shorter structures the file is qualified against a stress rate rather than the opening rate, so the approval does not rest on the rate staying where it started. Longer structures are qualified closer to the note rate.*
Rarely. Several programs state plainly that a 3/6 SOFR ARM is not eligible, and at least one program does offer one. On most of what we place the shortest fixed period is five years.
When your horizon is shorter than the fixed period. If you expect to move or refinance inside it, you are paying for protection you will not use.
Yes. Adjustable structures exist on government and non-QM programs as well as agency, though the specific structures available differ by program.*
It can. A small number of states apply stricter qualifying rules to the longer structures, which changes how the file is reviewed rather than whether the loan exists.*
Find out what you qualify for
If you know roughly how long you will hold this home, there is likely a Saxton Adjustable Rate Loan that fits. Get a fast, no obligation pre-qualification today.
Get Pre-Qualified- Consumer Financial Protection Bureau, mortgages
- Consumer Financial Protection Bureau, buying a house: tools and resources for homebuyers
*Loan amounts, rates, terms, and down payment requirements are subject to credit approval, income and asset verification, and program eligibility. Adjustable rate structures, index, caps and qualifying rules vary by program and by state. The rate adjusts after the fixed period ends and the payment can rise. Requirements vary by occupancy, credit profile and documentation type. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.