How long do I plan on being in this home?

Answer this question before you select your mortgage. When you get a mortgage you can choose between an adjustable rate mortgage (ARM) or a fixed rate mortgage. ARMs usually have 1 to 7 year terms while fixed rate mortgages range between 10 and 30 years.

If you’re planning on being in your home less than seven years, an ARM may be a wise choice. Here’s why:

ARMs generally have lower interest rates than fixed rate loans. If you’re planning on moving in five years, there’s no need for you to pay the higher rate of a 30 year mortgage.

EXAMPLE: Save more than $1,000 per year on your mortgage payment with an ARM.

For example, take a 5 year ARM rate* on a $200,000 mortgage at 3.207% APR, compared to 4.357% APR for a 30 year fixed rate. Choosing an ARM for your mortgage could save you around $127 per month on your mortgage payment. That’s over $1,500 per year in savings, more than $7,500 in savings during the 5 year term.

If you have questions or don’t quite know if you should select an ARM or a fixed rate mortgage, contact your local Heritage branch — we’re happy to help.

Have questions about mortgages?

Mortgage Resources:

Visit our Home Loan webpage to see all of our mortgage resources, or see today’s mortgage rates or estimate how much house you can afford.

*Calculated using Heritage Credit Union rates quoted on April 11, 2017. Rates are subject to change.