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Posted on Tuesday, October 11, 2022 in Mortgage Lending

Stuck in an Adjustable-Rate Mortgage, Now Might be a Good Time to Refinance 

Adjustable-rate mortgages (ARMs) can be attractive because their interest rates are typically lower at first in comparison to a 15-year or 30-year fixed mortgage. But that gap narrows and widens over time.

Because ARM rates are locked for only the first few years, it’s possible for your rate and payment to rise to an unaffordable level. In the long run, an ARM could end up costing more than a fixed mortgage with a higher upfront rate.  

With a fixed-rate mortgage, you can be sure that all your monthly payments will be the same over the life of the loan. And that offers a lot of peace of mind. With an ARM, you don’t have the same guarantee.

Is it time to get out of your ARM and refinance to a fixed-rate loan?

First National Bank (FNB) always puts their customers’ best interests first. The bank doesn’t offer adjustable-rate mortgages for the very fact that they are inherently riskier for the homeowner. FNB’s lenders are aware of the negative consequences of ARMs, and how borrowers can suffer during periods of rising interest rates.   

If you have an ARM that is reaching the end of its locked-in rate, now may be a good time to consider refinancing your loan to get a fixed-rate mortgage. Even if you are a risk-taker, you still need to be aware of just how high your monthly payments could go. And you’ll want to be sure you can cope, if the worst happens…interest rates keep rising, as currently indicated by the Federal Reserve, and your payment skyrockets.

No one can say for certain. Economists are divided over what they think will happen to inflation. But if mortgage interest rates keep rising and in a sharp way, homeowners with ARMs could end up being exposed to a significant amount of risk. 


Speak to a FNB mortgage lender about refinancing options and whether a fixed-rate mortgage loan could reduce your risk and better position you financially for the long-term. Mortgage loan consultations are available at no cost to you, and you’ll be speaking to a friendly, helpful and experienced local lender.

FNB’s mortgage lenders can run different mortgage calculations to help you see what could happen to your monthly payment if your rate is unlocked and interest rates rise. Then you can ask yourself how comfortable you are if payments go higher over time. They will also share information about alternatives, including 15- and 30-year fixed-rate mortgage loans.

If you’re not comfortable with the prospect of higher payments, an ARM likely isn’t right for you, and refinancing to a fixed-rate mortgage may be more suited to you.

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