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What is the difference between a fixed rate and adjustable rate mortgage?

It’s important to understand the difference between fixed and adjustable rate mortgages before you begin the mortgage process.

A fixed rate mortgage has a set interest rate that’s locked in at the time of the loan and doesn’t change throughout the life of the loan. 

An adjustable rate mortgage (ARM) has a variable interest rate based on an index and margin that is fixed for a period of time and fluctuates throughout the life of the loan. The fixed rate period varies according to the loan type. Common ARMs at Peach State include 5, 7 and 10 year fixed periods. 

For additional questions about our mortgage products, please contact our Mortgage Services Department at 770.580.6098 or mortgage@peachstatefcu.org

Use a mortgage calculator to compare an ARM mortgage vs. a fixed rate mortgage.