A Term Adjustable-Rate Mortgage (ARM) offers the security of an initial fixed-rate period of three, five, seven, or 10 years, followed by an adjustable rate for the life of the loan term combined with the flexibility of interest-only payments.¹ The initial period payments are typically lower than most fixed-rate mortgages.

Is a Term ARM right for me?

• If you plan to live in your home less than 10 years, talk to your Merrill Lynch Financial Advisor about the benefits of a Term ARM. 
  
  
• This mortgage allows you to customize your rate and payment by selecting the initial rate period that matches the length of time you plan to live in your home.

What are the features of a Term ARM?

• 30-year adjustable-rate mortgage with your choice of an initial fixed-rate period of three, five, seven, or 10 years, followed by an adjustable rate for the life of the loan term. Click here for Important Loan-Cost Disclosures.
  
  
• Interest-only payments available for the first 10 years on the 3, 5, 7 and 10-year products. Click here for Important Loan-Cost Disclosures.
  
  
• No prepayment penalties.
  
  
• If principal payments are made, subsequent interest-only payments will be recalculated monthly based on new lower principal balance.
  
  
• Large loan amounts available.²
  
  
• Periodic rate cap availability based on the initial rate term and the adjustment period of the remaining term of the loan.³
  
  
• Lifetime cap based on the loan amount and initial rate term selected.⁴
  
  
• Available for all types of one- to four-unit owner-occupied properties and New York co-ops.

¹When deciding whether an adjustable-rate mortgage is right for your situation, you should consider the potential risk of rising rates and payments and such factors as how long you plan to own your home.

This is an “interest-only” mortgage that allows you to pay only the interest on the money you borrow for a certain number of years. If you only pay the amount of interest that’s due, once the interest-only period ends, you will still owe the original amount you borrowed and your monthly payment will increase – even if interest rates stay the same – because you must pay back the principal as well as interest. You should ask what the payments on your loan will be after the end of the interest-only period. If you are considering an adjustable-rate mortgage, ask what your payments can be if interest rates increase.

²Loan amounts over $3 million available on a negotiated basis.

³Does not apply to initial adjustment after the initial period.

⁴The rate cap depends on the term selected, loan amount and/or interest-only versus amortized payments.