Mortgage Loans | Adjustable Rate

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ARMs offer flexibility and lower initial rate

An ARM provides an opportunity to get into a new home at a lower rate, with the rate fixed for an initial period of 3, 5, 7 or 10 years. After this initial fixed period, the rate will adjust every six months.

What are the benefits of an ARM?

Take advantage of a lower interest rate that will not change for the initial fixed period.
Choose from a 3/6mo, 5/6mo, 7/6mo or 10/6mo ARM. Depending on your choice, the rate will remain unchanged for 3, 5, 7 or 10 years and can adjust every 6 months thereafter.
After the fixed period, rate (tied to a market index) has potential to decrease.
If interest rates drop, so will your monthly payment.
After the fixed period, the interest rate cannot increase or decrease more than 2% at the first adjustment; interest rate cannot increase or decrease more than 1% at future adjustments and no more than 5% over the Initial Rate for the Life of the Loan.
You have the option to refinance at the end of the fixed rate period.

Is an ARM right for you?

Ideal if you think future interest rates could decrease.
You intend to use the savings from your lower rate and payment to pay down your loan more quickly.
You plan to own your home for a short time or expect a significant increase in future earnings.

Ask us about an Adjustable Rate Mortgage.

If you have questions, please submit our information request form or contact your nearest Old National mortgage expert.

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Notices & Disclosures

Subject to credit approval. Property insurance required. All funds will be verified.

Example of how an ARM is calculated: On a $80,000, 5/6mo ARM amortized over 20 years with an initial interest rate of 4.375% with an annual percentage rate of 4.461%, after fixed-period of 5 years the rate may increase every six months; individual adjustments are capped at 2% first, 1% subsequent and rate can never increase by more than the lifetime cap of 5%. A payment example would be as follows based on a fully-capped interest rate of the loan: Months 1-60 at 4.375% rate with a payment of $500.74, Months 61-66 at 6.375% rate with a payment of $570.46, Months 67-72 at 7.375% rate with a payment of $606.19, Months 73-78 at 8.375% rate with a payment of $642.05, and Months 79-240 at 9.375% rate with a payment of $677.94. The monthly payment may change when the interest rate on an adjustable rate mortgage is reset. After the initial fixed-rate period, your interest rate can increase every 6 months according to the market index. Current index (30-day avg SOFR) as of April 21, 2021, is .011%. The current index plus Margin rounded to the nearest 0.125 is 3.000%. Any change may significantly impact your monthly payment.

Adjustable Rate Mortgage (ARM)