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F&M Bank

Adjustable-Rate Mortgages

A flexible home loan option built around your plans

An adjustable-rate mortgage, or ARM, offers a fixed interest rate for an initial period of time. After that initial period, the rate may adjust at scheduled intervals based on the terms of the loan.

Because the interest rate can change, your monthly principal and interest payment may increase or decrease over time.

At F&M Bank, our mortgage advisors can help you understand your options and determine which type of mortgage best aligns with your homeownership goals.

Wondering whether an ARM could fit your plans?

Buying before you sell? Explore our Equity Leverage Program.








Explore Our Adjustable-Rate Mortgage Options


5/5 ARM

The initial interest rate remains fixed for the first 5 years. After that, the rate may adjust once every 5 years.

7/3 ARM

The initial interest rate remains fixed for the first 7 years. After that, the rate may adjust once every 3 years.

10/3 ARM

The initial interest rate remains fixed for the first 10 years. After that, the rate may adjust once every 3 years.



























The first number represents how long the initial rate remains fixed, while the second represents how frequently the rate may adjust afterward. For example, with a 7/3 ARM, the initial rate is fixed for seven years. After the initial seven-year period, the interest rate may adjust every three years for the remainder of the loan.

F&M Equity Leverage Program

Your next home.
Before you sell.

Buy or build your next home before selling your current one.

F&M’s Equity Leverage Program uses your current home and your next property as collateral for a new purchase or construction loan. Your existing equity may help meet down payment requirements without a separate home equity loan.

Available only with an eligible F&M portfolio adjustable-rate mortgage (ARM). Your interest rate and monthly principal and interest payment may change after the initial fixed-rate period.

  • Move on your timeline

    Buy or build before your current home sells.

  • Put your equity to work

    Use eligible equity to support your next purchase or build.

  • Make a more flexible offer

    You may be able to make an offer without a home-sale contingency.

Know before you move

Both properties secure the loan. If you default, both properties could be subject to foreclosure.

Before moving forward, talk with your Mortgage Advisor about qualification requirements, costs, closing timing, and what is required to release your current home from the loan when it sells.

Let’s talk about your next move.

An F&M Mortgage Advisor can help you explore whether the Equity Leverage Program fits your plans.

Talk to a Mortgage Advisor

Available only with an eligible F&M portfolio adjustable-rate mortgage (ARM). Not a commitment to lend. Subject to credit approval, borrower qualifications, property eligibility, and program requirements. Interest rates and payments may change. Both properties secure the loan; default could result in foreclosure on both properties to satisfy the balance owed. When your current principal residence secures the loan, a three-business-day right of rescission applies under federal law. Ask your Mortgage Advisor about timing, costs, and requirements for releasing your current home from the loan.









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How Does an ARM Rate Adjust?

After the initial fixed-rate period ends, your rate is determined using an applicable U.S. Treasury rate plus a predetermined margin, subject to the adjustment limits of your loan.

For 7/3 and 10/3 ARMs, the adjustment is based on the 3-Year U.S. Treasury rate at the time of adjustment. For a 5/5 ARM, the adjustment is based on the 5-Year U.S. Treasury rate at the time of adjustment.

The applicable margin is:

  • 2.75% for primary and secondary residences
  • 3.25% for investment properties

Built-In Rate Limits

F&M Bank ARM loans include limits on how much the interest rate can change.

2 percentage-point adjustment cap
At each adjustment period, the rate cannot increase by more than 2 percentage points from the rate in effect immediately before the adjustment.

Lifetime rate cap
For primary and secondary residences, the rate cannot increase by more than 6 percentage points above the initial interest rate over the life of the loan.

For investment properties, the lifetime cap is 8 percentage points above the initial interest rate.

4.50% rate floor
The interest rate cannot adjust below 4.50% at any adjustment period.

 

 

Could an ARM Fit Your Plans?

An adjustable-rate mortgage may be worth considering if you:

  • Are comparing different mortgage structures for an upcoming home purchase.
  • Expect your housing needs to change before or around the first adjustment period.
  • Are interested in a mortgage that begins with a fixed-rate period and may adjust later.
  • Understand that your interest rate and monthly payment may change after the initial fixed period.

There is no one-size-fits-all mortgage. An F&M Bank mortgage advisor can help you compare adjustable- and fixed-rate options based on your individual goals.
























































Want to Learn More About How ARMs Work?

Compare adjustable-rate and fixed-rate mortgages, learn how rate adjustments work, and explore questions to consider when choosing a home loan.
 




Ready to Explore Your Mortgage Options?




























Adjustable-Rate Mortgage FAQs

A 7/3 ARM has an initial interest rate that is fixed for seven years. After that, the rate may adjust once every three years.

A 10/3 ARM has an initial interest rate that is fixed for ten years. After that, the rate may adjust once every three years.

Yes. After the initial fixed period, the rate may increase or decrease based on the applicable index and the terms of your loan. F&M Bank ARM loans are also subject to applicable adjustment caps, lifetime caps, and a 4.50% rate floor.

The answer depends on your individual plans, financial situation, and comfort with potential future rate changes. An F&M Bank mortgage advisor can help you compare available options.