Why This Buyer Chose an ARM Loan and Saved $14,000
- By Jim Blackburn
- on
Client Profile:
- Name: Kyle
- Age: 34
- Occupation: Commercial airline pilot
- Goal: Buy a townhouse now, upgrade to a larger home in 5–7 years
- Location: Charleston, SC
The Situation
Kyle had just finished his first full year making six figures and was ready to purchase his first home. He wanted a 3-bedroom townhome close to the airport — but didn’t want to be “married to the mortgage” forever.
He was approved for a conventional 30-year fixed rate loan at 6.875%.
But we showed him another option: a 7-year ARM at 5.625%, which was locked for 7 years and matched his timeline to move.
The Analysis
We helped Kyle compare both loan types using our Fixed vs. ARM Worksheet.
Option | Monthly Payment | Interest in 7 Years | Total Paid (7 yrs) |
Fixed (6.875%) | $2,310 | $93,600 | $193,200 |
7-Year ARM (5.625%) | $2,024 | $76,200 | $175,500 |
Difference | –$286/mo | –$17,400 | –$17,700 |
Kyle planned to sell or rent the home before year 8 — well before the ARM would adjust.
The Result
By choosing the ARM:
- He saved $14,000+ in interest over the first 7 years
- He used the extra monthly savings to invest in his Roth IRA
- He felt comfortable knowing his exit timeline aligned with the fixed ARM period
Bonus: When he moved in year 6, he kept the property as a rental — and cash flows $412/month with the lower mortgage payment.
What Kyle Said
“I used to think ARMs were risky. But this actually gave me way more flexibility. I didn’t want to pay extra just for ‘safety’ I wouldn’t need.”
Takeaway for Readers
Adjustable-rate mortgages aren’t always a gamble. When used strategically, they can maximize savings during the exact years you plan to own or occupy the home.
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