PenFed is offering a new mortgage which is kind of an interesting concept. Here are the highlights:

• 5.625% Rate (5.377% APR)
• Low rate that only adjusts every 5 years for 30 years
• Rate would adjust up to 2% or our prevailing rate, whichever is the lowest
• Maximum lifetime adjustment that will not exceed 5% above the initial rate

The loan features all the usual PenFed advantages as well - no points, no closing costs, and 90 day rate lock. Seems like a good deal for those looking at ARMs. Its basically a 5/5 ARM but the adjustment rate is based on PenFed’s 30 year fixed rate which is typically pretty competitive. I”m sure the 5% max increase may scare some since it could go up to 10.625% but at least in the next 10 years the highest it can go is 7.625%.

PenFed 5 Year Fixed Rate Mortgage