Fixed Rate and Adjustable Rate Mortgages

Capitol Federal offers fixed rate and adjustable rate mortgage (ARM) loans to purchase or construct* owner-occupied single family homes. There is no minimum loan amount. The maximum loan amounts, the types of loans and the loan-to-value ratios may be discussed with a loan professional. Loan-to-value ratio is the percentage of loan amount to the sales price or appraised value (whichever is lower) of the secured property. Loan terms up to 30 years are available.

Fixed Rate Mortgage

A fixed rate mortgage guarantees the interest rate will remain the same over the life of the loan. This offers you the security of knowing the principal and interest portion of your monthly payment will not change.

Adjustable Rate Mortgage (ARM)

The initial interest rate on an ARM is usually lower than the rate on a fixed rate loan.

The ARM interest rate is determined by a formula based on an index that reflects current market conditions plus a margin added to the index. The index value varies and is available upon request or at application time.

Capitol Federal ARM loans include an annual cap and a lifetime cap. The annual cap limits the amount we can increase or decrease your interest rate annually. The lifetime cap is your maximum interest rate during the life of the loan.

ARM loan plans:

• 3/1 ARM - The interest rate on a 3/1 ARM will remain fixed at the initial rate for the first three years. After that, the interest rate will change annually based on the value of the index plus the margin, subject to annual and lifetime interest rate adjustment caps.
• 5/1 ARM - Identical to the 3/1 ARM except the initial rate is fixed for the first five years.
• 7/1 ARM - Identical to the 3/1 ARM except the initial rate is fixed for the first seven years.

*Construction loans may not be available in all areas.