Adjustable-rate mortgages in Colorado
A lower starting rate for the years you plan to own
An ARM fixes your rate for the first 5, 7 or 10 years, then adjusts within set caps. It can fit buyers who expect to sell or refinance before the fixed period ends.
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Why buyers choose an ARM
A shorter fixed period in exchange for a starting rate that is often lower.
Lower starting rate
Fixed for 5, 7 or 10 years
Rate caps
Room to sell or refinance
ARM options
- 5/6 ARM
- Fixed for 5 years, then adjusts every 6 months. Suits shorter ownership plans.
- 7/6 ARM
- Fixed for 7 years, then adjusts every 6 months.
- 10/6 ARM
- A full decade at a fixed rate before the first adjustment.
- 5/1 and 7/1 ARMs
- Some jumbo and portfolio ARMs still adjust once a year after the fixed period.
When an ARM can make sense
Your payment can rise after the fixed period, so an ARM works best with a clear plan.
- You plan to sell or move within the fixed period
- You expect to refinance before the first adjustment
- You're buying in a Colorado resort market with a planned resale
- You're an investor with a defined exit strategy
- You want a lower payment in the early years and understand it can rise later
ARM loan questions
An ARM has two phases: a fixed-rate period (typically 5, 7 or 10 years) where your rate stays the same, followed by an adjustment period where the rate can change based on a market index (usually SOFR) plus a margin, within the loan's caps.
The first number is the fixed-rate period in years; the second is how often the rate adjusts after that. Most conforming ARMs today are SOFR-indexed 5/6, 7/6 and 10/6 loans: fixed for 5, 7 or 10 years, then adjusting every 6 months within caps. Some jumbo and portfolio ARMs, such as a 5/1 or 7/1, adjust once a year instead.
Yes. ARMs have an initial adjustment cap (the most the rate can change at the first adjustment), a periodic cap (the most it can change at each later adjustment) and a lifetime cap (the most it can rise over your starting rate). Cap structures vary by loan, so we'll show you the exact caps and a worst-case payment before you commit.
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Compare an ARM against a fixed rate
Get pre-approved and Andrew will show you ARM and fixed-rate payments side by side for your purchase.