Mortgage Rate Options

A fixed-rate mortgage offers complete stability and predictability for your monthly payments. The interest rate is set when you close the loan and remains the same for the entire duration of the loan term (commonly 15 or 30 years). This means your principal and interest costs will never change, protecting you from future market rate fluctuations.

A Graduated Payment Mortgage (GPM) is a fixed-rate loan where payments start low and increase annually for a set period (usually 5–10 years) before leveling off. Key Benefits: Lower Initial Costs: Ideal for first-time buyers who need smaller payments at the start of the loan. Matches Future Income: Perfect for professionals who expect their salary to rise as the payment increases. Increased Buying Power: Lower starting payments can help you qualify for a more expensive home than a traditional fixed-rate loan. Predictable Schedule: Unlike an ARM, the payment increases are locked in from day one, so there are no surprises. Early Homeownership: Allows you to stop renting and start building equity sooner by qualifying with a lower current income.

An Adjustable-Rate Mortgage (ARM) typically starts with a lower initial interest rate than a fixed-rate loan for a set period (e.g., 5, 7, or 10 years). After this initial fixed period ends, the interest rate can adjust periodically based on current market indexes. This option can offer lower initial monthly payments but carries the risk that your payments may increase significantly over time as rates fluctuate.

An interest-only mortgage allows the borrower to pay only the interest portion of the loan for a specified initial term (e.g., the first 5 to 10 years). This results in significantly lower monthly payments during that period compared to a traditional principal-and-interest loan. However, once that initial term ends, the borrower must begin paying both principal and interest, which can cause monthly payments to increase substantially as they must pay off the entire loan amount by the maturity date.