District of Columbia Fixed Rate Mortgage
Back in the day when workers stayed at the same job throughout their careers and families had the same address until the kids went off to college, the fixed-rate mortgage (FRM) was synonymous with stability. For the entire loan term, payments and the rate of interest were unchanged. And that’s the way FRMs still are today.
The 5/5 & 5/1 Adjustable Rate Mortgage
That same stability for years 1 through 5 is what you get with the 5/5 or 5/1 ARM. But then, beginning with the sixth year, interest rates adjust and therefore, monthly payments adjust as well. With a 5/5 ARM, rate adjustments occur every 5 years. With the 5/1 ARM, rates adjust annually.
