2 Year Mortgage Information

This is an Adjustable Rate Mortgage that has an initial 'Fixed Rate' period of 2 years (24 Months). During this period the interest rate and the monthly payment will remain constant. After the expiration of those two years the loan will then adjust in relation to a mortgage Index.

It should be noted that 2 yr Mortgages are almost always 'subprime' or 'alt-a' loans. In other words, they are traditionally only offered to people with less-than-perfect credit. Since most of these loans are offered by such lenders and most 'subprime' lenders have loans with prepayment penalties then you can deduce that most two year mortgages also have prepayment penalties (though not all of them have such penalties).

The benefit of these types of loans is that the interest rate is lower than it would be if you were to get a thirty year fixed loan. This means you can get a lower payment and then refinance into a lower rate once the initial two years is over.

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