• 1-3
  3-5
  5-7
  7-10
  10+

3/1 ARM, 
5/1 ARM
7/1 ARM
10/1 ARM, 30 year fixed or 15 year fixed
30 year fixed or 15 year fixed

Fixed Rate Mortgages

• 30 Year fixed
• 15 Year fixed

• Monthly payments are fixed over the life of the loan
• Interest rate does not change
• protected if rates go up 
• can refinance if rates go down

• Higher interest rate
• Higher mortgage payments
• Rate does not drop if interest rates improve

Adjustable Rate Mortgages

• 10/1 ARM
• 7/1 ARM
• 3/1 ARM

• Lower initial monthly payment
• Lower payment over a shorter period time
• Rates and payments may go down if rates improve
• May qualify for higher loan amounts

• More risk
• Payments may change over time
• Potential for high payments if rates go up

• Lower Down payment
• Easier to qualify
• Sometimes you may get lower rates

• May be subject to income and property value limitations
• Some programs which have government subsidies may have a recapture tax if you sell the house too early

• No closing costs
• Less money required to close

• Higher rates
• Higher payments