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What Can DCU Save You?

ARMs – Adjustable Rate Mortgages

The best value for most homeowners



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ARM Features

  • Rate and payment are fixed for 5, 7, or 10 years then . . .
  • They can change every 1 year thereafter (every 5 years for the 5/5)
  • Lower starting rate than fixed-rate mortgages
  • Up to 30 year term
  • Loans up to 95% of home value
  • No point option
  • DCU service for the life of your loan
  • For home purchase or refinance
  • Borrow for 1 to 4 family primary residences
  • Can use to finance condominiums and townhouses

Please refer to Details and Rates tabs for additional information and important disclosures.

"Quick and Easy"

Open quote I refinanced my home with a 5/1 ARM. It took just 44 days from my initial online application to closing the loan. The process was easy, communication good, fees were just as described upfront, and a great rate. Close quote

— Lilly1, Westborough, MA

What is an ARM or Adjustable Rate Mortgage?

  • A 30-year mortgage
  • In the case of a 5/5 ARM, the rate is fixed for the first five years, and can change down or up only once every five years thereafter until the end the loan.
  • In the case of a 5/1, 7/1, or 10/1 ARM, the rate is fixed for first five to ten years, then can change up or down once every year thereafter until the end of the loan.
  • The starting interest rate is almost always below a 30-Year Fixed-Rate Mortgage.
  • The shorter the initial fixed period, the lower the starting rate usually is.

If you are only going to be in your current home 5 to 10 years like most people, why pay a higher rate to fix your rate for 30 years? You can save a lot of interest by choosing an ARM. Learn more about when an ARM is the right choice.

Main Benefits of the ARMs

  • Low starting rates
  • Four options for ARMs periods

    • 5/5 ARM – This is the best option for most members. It's a 30-year mortgage that starts out with a low fixed rate for 5 years. Thereafter, the interest rate may change no more than 2% down or up every 5 years and 5% in either direction over the life of the loan. That's just one adjustment in the first 10 years.
    • 5/1 ARM – This 30-year mortgage starts out with a low fixed rate for 5 years. Thereafter, the interest rate may change no more than 2% each year and 5% over the life of the loan.
    • 7/1 ARM – This 30-year mortgage starts out with a low fixed rate for 7 years. Thereafter, the first rate change will have a cap of 5% and each additional rate change will be capped at 2%. The life time cap will be 5%.
    • 10/1 ARM – This 30-year mortgage starts out with a low fixed rate for 10 years. Thereafter, the interest rate may change no more than 2% each year and 5% over the life of the loan.
  • Lower starting rate than fixed-rate mortgages
  • Competitive rates for loans of every size
  • Up to 30 year term – A longer term helps keep monthly payments more affordable. A shorter term saves you interest and builds equity faster.
  • Loans up to 95% of home value – However, if you borrow no more than 80%, you'll avoid the expense of private mortgage insurance (PMI). Loan to value is determined by the total loan amount divided by the home value. The home value is the lesser of either the purchase price or appraised value.
  • No point option – Typically chosen for refinances. Paying points reduces your starting rate. We can help you decide what's best for your situation.
  • DCU service for the life of your mortgage – We'll handle all your payments, escrow, and questions. You'll have access to your mortgage account through Online Banking, Easy Touch Telephone Teller, DCU ATMs, and our branches for getting information and making electronic payments. Most important, you'll never have to worry about late or missing payments if your mortgage is sold.
  • For home purchase or refinance
  • Borrow for 1 to 4 family primary residences
  • Can use to finance condominiums and townhouses

When is an ARM the right choice?

Consider your answers to these questions when considering your options...

  • How long do you intend to live in the home? – On average, people move or refinance their mortgages every 5 to 7 years. If you expect to remain in your home longer than 7 years, a 5/5 Mortgage could make more sense because your rate and payment will rarely change. If you expect to move or refinance sooner, a 5/1 Mortgage may be more economical choice. You have a lower starting rate fixed for the first few years.
  • Do you need the smallest possible payment? – Fixed-rate mortgages have the highest rates because the lender assumes all the risk that rates may go up. If you need smaller payments to get into a home, ARMs have lower starting rates and payments than fixed.
  • Is a stable payment more important to you than the lowest rate? – The ARMs with an initial fixed-rate period give you stable rate and payment for up to ten years. Realize that if you want to fix your payment longer than that, it could cost you thousands in extra interest.
  • How high are mortgage rates in general and where might they be moving? – Predicting where mortgage rates will move is impossible to do with any certainty. Market rates are generally determined based on the inflation expectations of bond-market investors, foreign demand for US Treasury securities, and the impact of Federal Reserve monetary policy. However, we can tell you if current rates are relatively high or low based on recent history. Generally anything under 5% is low. If you'll be in a house longer than 7 years, you might prefer 5/5 ARM or a Fixed-Rate Mortgage. On the other hand, if rates are 9% or above, an ARM with a shorter fixed period may be better. Rates that high generally don't stay high for long. Your rate will adjust downward when rates fall without the cost of refinancing.

Adjustable Rate Mortgage (ARM) Rates for loans up to $424,100*

Term / Property Months Points Interest Rate APR** Initial/Annual/
Life Rate Change
Caps
Margin/Index Estimated
Monthly Payment
per $1,000
5/1 ARM First 60
Next 300
0 2.875%
4.125%
3.75%
3.75%
2% / 2% / 5% 2.75% / 1.41% $4.15
$4.74
5/5 ARM First 60
Next 300
0 3.125%
4.750%
4.24%
4.24%
2% / 2% / 5% 2.75% / 1.94% $4.28
$5.08
7/1 ARM First 84
Next 276
0 3.000%
4.125%
3.67%
3.67%
5% / 2% / 5% 2.75% / 1.41% $4.22
$4.72
10/1 ARM First 120
Next 240
0 3.250%
4.125%
3.66%
3.66%
5% / 2% / 5% 2.75% / 1.41% $4.35
$4.70

*Rates are effective  and are subject to change at any time, and may increase. Rates locked in today for 60 days have an expiration date of . Rates apply to loans up to $424,100 (also known as "conforming mortgages").

Estimated Monthly Payment per $1000 – Loan principal and interest. If an escrow account for taxes and insurance is required, total monthly payment will be higher. The stated amount per $1,000 is based on the fixed rate period and the payment will likely increase after that period of time.

**APR – Annual Percentage Rate. Please note that APR may increase after consummation.

All rates are based upon a 30-year term, owner occupied, and up to 60% of home value.

Rates and Fees disclosed are for loans that meet Secondary Mortgage Market underwriting standards; additional rate and fees may apply for loans outside of those guidelines.

Rate Change Caps – This is the maximum amount interest rates on Adjustable Rate Loans can change up or down. The first number is the amount they can change up or down on the first adjustment date. The second number is the amount they can change each subsequent year on the anniversary date. The third number is the maximum total change, up or down, over the life of the loan. Since the index in the future is unknown, the first adjustment payments displayed are based on the current index plus the margin (fully indexed rate) as of the effective date above.

Adjustable Rate Mortgage (ARM) Rates for loans over $424,100*

Term / Property Months Points Interest Rate APR** Initial/Annual/
Life Rate Change
Caps
Margin/Index Estimated
Monthly Payment
per $1,000
Jumbo 5/1 ARM First 60
Next 300
0 3.000%
4.250%
3.85%
3.85%
2% / 2% / 5% 2.875% / 1.41% $4.22
$4.82
Jumbo 5/5 ARM First 60
Next 300
0 3.250%
4.875%
4.33%
4.33%
2% / 2% / 5% 2.875% / 1.94% $4.35
$5.16
Jumbo 7/1 ARM First 84
Next 276
0 3.125%
4.250%
3.76%
3.76%
5% / 2% / 5% 2.875% / 1.41% $4.28
$4.79
Jumbo 10/1 ARM First 120
Next 240
0 3.375%
4.250%
3.76%
3.76%
5% / 2% / 5% 2.875% / 1.41% $4.42
$4.77

*Rates are effective  and are subject to change at any time, and may increase. Rates locked in today for 60 days have an expiration date of . Rates apply to loans larger than $424,100 (also known as "jumbo mortgages"). Further restrictions apply for loan amounts over $424,100 such as credit score, Loan to Value, etc.

Estimated Monthly Payment per $1000 – Loan principal and interest. If an escrow account for taxes and insurance is required, total monthly payment will be higher. The stated amount per $1,000 is based on the fixed rate period and the payment will likely increase after that period of time.

**APR – Annual Percentage Rate. Please note that APR may increase after consummation.

All rates are based upon a 30-year term, owner occupied, and up to 60% of home value.

Rates and Fees disclosed are for loans that meet Secondary Mortgage Market underwriting standards; additional rate and fees may apply for loans outside of those guidelines.

Rate Change Caps – This is the maximum amount interest rates on Adjustable Rate Loans can change up or down. The first number is the amount they can change up or down on the first adjustment date. The second number is the amount they can change each subsequent year on the anniversary date. The third number is the maximum total change, up or down, over the life of the loan. Since the index in the future is unknown, the first adjustment payments displayed are based on the current index plus the margin (fully indexed rate) as of the effective date above.

Mortgage Fees

Item Fee
Mortgage Application Fee $300
Rate Lock Fee $0*

* There is no fee to lock your rate.

Other Approximate Mortgage Costs*

Item Approximate Cost
Closing Costs $1,900-$2,100 (not including points) per $100,000**

* Private Mortgage Insurance is also required if the loan to value is greater than 80%. The "Loan to Value" is the total loan amount divided by the value of your property. The value of the property is the lesser of either the purchase price or appraised value. Secondary Market Delivery Fees may be applicable in addition to the Approximate Closing Costs.

** Depends upon the state you are purchasing your home in. Fees may increase based on credit score, down payment, purpose of loan, subordinate financing and property type. Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.


ARMs - Adjustable Rate Mortgages is rated 3.7 out of 5 by 70.
Rated 5 out of 5 by from Awesome experience Thanks to Milton Webbe and Kathy, it was a very good experience and am happy to work with DCU
Date published: 2017-07-01
Rated 5 out of 5 by from New Home Owner Working with DCU was the easiest part of the whole process. They were so patient with how long everything took on our side (The town took a long time to approve paperwork) Their response time was amazing. They made me feel like I was the only member they were working with. They never made me feel rushed or dumb when I asked a question I didn't know the answer to. I would recommend DCU to anyone that is looking for a new home.
Date published: 2016-10-31
Rated 5 out of 5 by from Mortgage Process was easy and fast! DCU has the easiest and best mortgage application process I have ever seen or used. You made it so easy to apply and send information required for my mortgage. Sonya and Ben were more than helpful in processing my mortgage. I would recommend DCU to anyone looking for a mortgage.
Date published: 2016-02-16
Rated 5 out of 5 by from Attractive Rate, but not the APR Easy, and streamlined process. Attractive interest rate, but the APR is not.
Date published: 2015-09-19
Rated 5 out of 5 by from Just got a 10 year ARM from DCU for excellent interest rate. I had been a DCU member for over 17 years and am very pleased with their products and service.
Date published: 2015-06-28
Rated 5 out of 5 by from Fantastic service Mortgage representatives exceptional. Valerie and Ronel. Could not be more pleased with their support.
Date published: 2015-03-30
Rated 5 out of 5 by from Excellent Product & Service I have been a DCU member for the past 12 years and recently I re-financed my mortgage with DCU. I received exceptional service throughout the course of my refinance! From the start of my application till the end, everything was taken care of by the DCU associates and I really appreciate the services provided by DCU. I want to thank the associates personally. I strongly recommend DCU for those who want to buy or refinance their house. Thanks and Regards Sampath
Date published: 2013-05-11
Rated 5 out of 5 by from Great refi experience Very knowledgable staff. Communications were excellent. For myself it was a great opportunity to lower my rate and change from a 30 year to a 20 year. The best part is that it was so easy and smooth and all because of the staff at DCU worked hard to make it happen. My highest praises !!!!!!!
Date published: 2013-04-29
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What is the procedure for a mortgage payment adjustment if I make a large principal reduction?

Asked by: DCU Member
Once the principal reduction has been applied to the mortgage, you can call 508.263.6700 and request a mortgage payment adjustment. A member of the mortgage servicing team will prepare the necessary paper work and mail it out to you. Once the document has been signed and returned to DCU, the scheduled payment will be reduced to reflect the payment shown on the mortgage payment adjustment documentation.
Answered by: DCU Staff
Date published: 2013-10-23

When can I waive my PMI (Private Mortgage Insurance) on my first mortgage?

Asked by: DCU Member
PMI (Private Mortgage Insurance) automatically waives at 78% Loan to Value of the original value. A member can request that PMI be waived when the loan reaches 80% Loan to Value. The member's loan has to be in good standing for the last two years, and DCU would require an appraisal at the borrower's expense to verify the current property value has not declined. Please contact us for further information and assistance.
Answered by: DCU
Date published: 2013-10-23

If I lock my rate on my mortgage application and the current market rates go down, can I change the locked rate to the lower rate?

Asked by: DCU Member
No, once the rate is locked, it is locked for a 60-day period. If the applicant withdraws and re-applies within 60 days, they will receive the higher of the original rate lock or the current market rate.
Answered by: DCU Staff
Date published: 2013-10-23

Does DCU offer investment property loans?

Asked by: DCU Member
We do. For further details, please call our Information Center at 800.328.8797, option 7. To apply, please call 800.328.8797, option 3.
Answered by: DCU Staff
Date published: 2013-10-23

Why did my mortgage payment go up?

Asked by: DCU Member
This is usually due to a recent escrow analysis. When an annual escrow analysis is prepared it is based on the tax payments made over the previous 12 months, so if your taxes increase during the next 12 months DCU will pay your taxes even if you do not have enough in your escrow account at the time. When the next annual analysis is prepared your payment will be adjusted to reimburse your escrow account for any shortage that may have occurred over the past 12 months.
Answered by: DCU Staff
Date published: 2013-10-23
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"Low interest rate and No hassle service"

Open quote Low interest rate and No hassle service makes the ARM loan the best in class. Got a proactive offer for renewing my 5/1 loan which saved me a lot of money. Close quote

— Lakedude, Portland, OR

How to Apply for a DCU ARM

  1. Apply or get pre-qualified online – 24 hours a day, 7 days a week.
  2. Apply or get pre-qualified by phone – Call 508.263.6700 or 800.328.8797 (select 3) anytime Monday through Friday 8:00 am to 9:00 pm or Saturday 9:00 am to 3:00 pm, Eastern Time. A representative will guide you through the entire application process.
  3. At any DCU branch – Visit your local branch during normal business hours.

"Great Mortgages
with DCU"

Open quote Fabulous experience working with DCU to refinance my home. Highly recommend DCU to everyone. Close quote

— janedoe, Acton, MA

Mortgage Tools and Resources

Related Links

  • How finance charges are computed – This page explains how to calculate the interest on your loan.
  • StreetWise Guide to Credit and Credit Management –Get and keep a good credit rating. Recognize and deal with credit problems.
  • Payment Protection – Ease your loan payments, protect your family, and safeguard your credit rating. Payment Protection offered by DCU helps relieve the financial stress and worry related to making loan payments when your life takes an unexpected turn.
  • Homeowners Insurance through DCU Insurance – DCU Insurance offers insurance with the personal service you deserve. So whether you have Homeowners Insurance or need it, DCU Insurance could be the right choice for you.
  • DCU Realty – DCU Realty is a full-service real estate agency serving home buyers and sellers in Massachusetts and New Hampshire. Our team of certified buyer agents can show you any home on the market with no out of pocket cost to you. Put a licensed DCU Realty professional on your side before you start your home buying process so you can get the best home on the market at the best price.