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APR (Annual Percentage Rate) is based on a margin of 2.75 over the 30-day Average Secured Overnight Financing Rate (SOFR) index published by the Federal Reserve Bank of New York. 1-4 family up to 97% loan to value (LTV). The rates and terms described are based on the following assumptions. The purpose of the loan is to purchase a property, with a loan amount of $160,000 and an estimated property value of $200,000. The property is located in Connecticut. The property is an existing single-family home and will be used as an owner-occupied primary residence. An escrow (impound) account is required. The rate lock period is 60 days and the assumed credit score is 740.


Loan Details 10/6 Adjustable-rate Mortgage (ARM)

HOW YOUR PAYMENT CAN CHANGE (“Worst Case Scenario”). Your payment can change every 6 month(s) based on changes in the loan term, interest rate, or loan balance. For example, on a $10,000 loan with a 360- month term and an initial rate of 6.875 (based on a margin of 2.750 and index of 5.331 rounded to the nearest 0.125%) in effect February, 2024, the maximum amount that the interest rate can rise under this ARM program is 5.000 percentage points above the initial interest rate and the payment can rise from a first-year payment of $65.69 to a maximum of $93.47 in the 11th year.

Maximum Rate and Payment Adjustments

After the initial fixed-rate period based on the initial interest rate and interest rate caps disclosed below, this loan's maximum first adjusted rate will never be more than 11.500%, with a maximum first payment of $1,584.47 The maximum lifetime rate will never be more than 11.500% with an estimated maximum monthly payment of $1,584.47. 

Adjustable Rate Details

Current Index Rate 5.320% (variable)
Margin 2.750%
Rate Adjustment Frequency 6 Months
First Adjusted Interest Rate Cap


Periodic Adjusted Interest Rate Cap 1.000%
Lifetime Interest Rate Cap 5.000%


Current Index Rate

An indexed rate is an interest rate that is tied to a specific benchmark with rate changes based on the movement of the benchmark. Indexed interest rates are used in variable-rate credit products. The index for the 10/6 adjustable rate mortgage is the 30-day Average SOFR. Generally speaking, the current index rate plus the margin equals the rate you pay when you have an adjustable-rate mortgage. Generally the index rate plus (or minus) the margin equals the new rate that will be charged, subject to any caps.


The interest rate that is added to (or subtracted from) the index rate by the lender in order to determine adjustments to an ARM interest rate. The margin remains constant throughout the life of the mortgage and is specified in the promissory note.

Rate Adjustment Frequency

The number of months/years between scheduled interest rate changes.

First Adjusted Interest Rate Cap

The limit to how much the interest rate can increase when the first rate adjustment is made at the end of the initial fixed-rate period.

Periodic Adjusted Interest Rate Cap

The limit to how much the interest rate can increase at each periodic rate adjustment following the first rate adjustment.

Lifetime Interest Rate Cap

The limit on how much the variable interest rate can increase during the life of a loan.

Low down payment programs are also available. Rates are subject to change without notice. Variable and Adjustable rates may increase during the term of the loan. All mortgages with less than 20% down payment may require PMI (Private Mortgage Insurance). The rate and point structure will be the same as mortgages with a 20% down payment. Interest rates are subject to credit and property approval based on secondary market guidelines. Interest rates and APRs (Annual Percentage Rates) may vary depending on loan details, such as points, loan amount, your credit, and property occupancy. The rates shown are available to borrowers with a satisfactory credit history. For more information, view the Consumer Handbook on Adjustable-Rate Mortgages​.

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