California Mortgage Rates for 5 year ARM sink below 4%

Mortgage and Lending with Arcus Lending NMLS 8176

The Mortgage Rates for a 5 Year adjustable rate mortgage (ARM) sank to 4% (and lower in some cases)* yesterday for California homes. Freddie Mac average rates released on yesterday reported 5 Year ARM at 4.27% at 0.6 points. But the rate improvements later in the day has opened up great opportunities for California home owners and First Time Home Buyers. This could be great news if:

  • You already own a home but plan to move out by 2016.
  • You are a First-Time Home buyer and would like to move up in next 5-6 years.
  • You plan to pay off or substantially pay down your mortgage in the next 5 years.


Assumption for the chart: 30 Year Fixed rate at 5.25% and the 5 Year ARM at 4%.

On a 5 Year ARM loan, the rate remains fixed for first 5 years and may adjust after that to a higher rate. In the chart above you could save more than $16,000 in next 5 years on a $417,000 balance even after accounting for a small closing cost to refinance. On other loan balances too, the savings could be substantial. There are no cost refinances available as well.

Don't get me wrong. 30 Year Fixed rate is still a great option if you want a stable rate mortgage and plan to live in the house for a longer term. And the 30 year fixed rate continues to be at a historically lowest levels in low 5s.

Call me at 408.905.6261 or email me at if you would like a free evaluation of your mortgage to see if an ARM loan is right for you. Since I am a mortgage broker approved with more than 100 lenders, I can shop for the best rates for you.

* The rates are subjected to change any time without notice. Credit, Income, Equity and other eligibility required to qualify.

Related Post - Rates set to go up after March 2010


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Shashank Shekhar

Mortgage Broker/Banker | San Jose, CA

(408) 615-0655 |

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