You’ve found your dream home—congratulations! Now comes one of the most important decisions in your homebuying journey: choosing the right mortgage. For most buyers, the choice comes down to a 30-year fixed-rate mortgage or an Adjustable Rate Mortgage (ARM).
Let’s break down the pros and cons of each, and how Union Savings Bank’s expert loan officers can help guide you to the best fit for your financial future.
Fixed Rate Mortgage: Stability and Simplicity
A fixed-rate mortgage offers predictable monthly payments for the life of the loan. It’s ideal for buyers who:
- Plan to stay in their home long-term
- Prefer budgeting with certainty
- Are risk-averse or on a fixed income
While fixed rates may be slightly higher than ARM rates initially, they provide peace of mind and long-term stability.
Adjustable Rate Mortgage (ARM): Flexibility and Savings
An ARM typically offers a lower initial interest rate, fixed for the first 7 years. After that, the rate adjusts annually based on market conditions. Union Savings Bank’s ARM product adjusts based on the average weekly yield of the 1-year U.S. Treasury bill, plus a 2.75% margin.
Here’s a look at how that rate has historically behaved:
ARM Benefits
- Lower initial payments
- Potential savings if you sell or refinance within 7 years
- Ideal for financially flexible buyers or those expecting income growth
ARM Risks
- Rates can increase after the fixed period
- Monthly payments may rise
- Not ideal for buyers on tight budgets or fixed incomes
Union Savings Bank’s ARM product allows:
- Up to 2% adjustment on the first reset
- 2% annual adjustments thereafter
- A maximum lifetime adjustment of 6%
Personalized Guidance from Union Savings Bank
Choosing between a fixed-rate and ARM mortgage isn’t just about numbers—it’s about your lifestyle, goals, and financial comfort. That’s why Union Savings Bank’s professional loan officers are here to help you:
- Understand your options
- Evaluate your financial situation
- Make a confident, informed decision
Whether you’re a first-time buyer, a seasoned homeowner, or a real estate professional helping clients, our team is ready to provide personalized mortgage counseling every step of the way.
Let’s Talk
Still unsure which loan is right for you? Call Union Savings Bank today and speak with a mortgage professional who can walk you through your options and help you make the best choice for your future. Learn more.
All loans are subject to credit approval.