It’s not every day that a promotion turns into a flagship product. But when we saw how investors were using the enhanced version of our 5/6 ARM and heard their feedback on how to improve it, we realized it was more than just a temporary offer. It was an opportunity to give investors more control, with a loan designed for timing, flexibility and strategy.
That’s why we officially launched the 5/6 ARM Pro. With better pricing, a lower minimum rate and no prepay penalty after three years, this upgraded version of our 5/6 ARM makes it easier to align your financing with your exit strategy.
Not sure if this loan fits your investment goals? Keep reading as we explain the details of the 5/6 ARM Pro, including how it compares to other adjustable-rate mortgages, who it’s best suited for and how to use it strategically as part of your overall plan.
What Is the 5/6 ARM Pro and Why We Created It
At its core, the 5/6 ARM Pro is a direct response to what SFR investors have been asking for: a flexible DSCR loan option that aligns with their strategies, timelines and exit plans. With our original 5/6 ARM serving as the foundation, this enhanced version keeps what worked, and improves what matters most.
We listened to feedback and saw how investors were using the original product. The result? A new core offering with even better pricing, greater early-exit flexibility and a lower minimum rate.
Here’s what makes the 5/6 ARM Pro different:
- No prepay after three years: The prepayment penalty drops off entirely after year three, giving you more flexibility to sell or refinance on your terms
- Lower floor rate (3/3/3 cap only): A 37.50 bps reduction on the minimum interest rate compared to our standard 5/6 ARM
- Improved pricing: Benefit from a 17.5 bps flat pricing improvement, helping you lower your cost of capital from day one
The 5/6 ARM Pro isn’t about constraints; it’s about giving you the options to pursue various avenues. With room to refinance, sell or wait for rate shifts, the 5/6 ARM Pro keeps your investment strategy flexible.
Strategic Use Cases for the 5/6 ARM Pro
From the moment we launched the initial promotion, investors didn’t hesitate to put the new loan option to work. The following scenarios reflect how this loan has already been used, and how it can be used to support a wide range of investment strategies, from refinances to well-timed exits and everything in between.
These examples aren’t exhaustive, but they highlight some of the most common and effective ways investors are leveraging this mortgage option.
Use case one: Leveraging equity in an appreciating market
A common approach with the 5/6 ARM Pro is to buy in a fast-growing market where property values are expected to rise. From the start, the objective is clear: hold the asset for a few years, let it appreciate, then complete a cash-out refinance to fund the next investment.
The 5/6 ARM Pro supports this approach by offering lower monthly payments during the initial fixed period and allowing you to access equity after year three with no prepayment penalty.
Compared to our standard 5/6 ARM, the Pro version offers two distinct advantages: a lower initial rate and the flexibility to refinance or sell on your terms, making it the perfect fit for this type of equity-focused strategy.
Use case two: Rate timing hedge
A popular approach when using adjustable-rate mortgages is to bet that rates will drop before the end of the fixed period. With the 5/6 ARM Pro, investors can act on that belief by locking in a lower initial rate now, holding through years one to three, then refinancing when the market shifts.
This approach is popular among investors who are confident rates will drop in the near future. As a result, this technique creates breathing room by keeping monthly payments low upfront and maintaining the flexibility to pivot when better rates arrive. And with no prepayment penalty after year three, there’s no punishment to exit when the timing feels right.
Unlike the standard 5/6 ARM, the Pro version gives investors who want to pursue this approach more options.
Note: This approach involves market timing and carries risk. Be sure to consult with a qualified financial advisor to determine whether it’s appropriate for your investment goals and risk tolerance.
Use case three: Reposition / planned exit strategy
Another common approach with the 5/6 ARM Pro is to purchase a property with a clear three- to five-year exit strategy in mind. This might include repositioning the asset like the BRRRR method or timing the sale to your broader investment goals.
Leveraging the 5/6 ARM Pro for this type of approach can work well due to the no prepayment penalty after three years. As a result, you can exit cleanly and keep the momentum going to the next deal.
Make the Most of the 5/6 ARM Pro: Questions To Consider
The 5/6 ARM Pro was created for flexibility, but using it well requires deliberate planning. Whether you’re refinancing, selling or just waiting out the first few years, there are strategic ways to match your financing with your overall goals. Use the questions below to help determine if this mortgage option can support your goals for a specific property and your long-term plan.
- Do I prioritize long-term stability or near-term cash flow? Understanding your income needs and timeline will help determine if a lower initial rate aligns with your broader investment strategy
- Am I expecting appreciation in the next three to five years? If you’re banking on property value growth, the fixed period can give you room to reposition or refinance before a rate adjustment
- What’s my goal for this property? Clarify whether you’re planning to hold long-term, exit quickly or build equity for another deal. A clear understanding of your strategy will help determine how to best use the loan or whether a different mortgage option makes more sense
- How does this property fit into my overall investment strategy? Consider how this loan supports your broader goals
- What’s my exit plan between years three and five? With no prepay penalty after year three, you’ll want a plan in place before the rate adjusts
- Do I want to do another loan soon? Consider whether you enjoy the loan process and if taking out another mortgage aligns with your short- or long-term investment goals
- What’s my comfort level with risk and rate movement? The 5/6 ARM Pro offers a lower starting rate, but it’s important to understand your tolerance for future fluctuations
Your 5/6 ARM Pro Strategy Starts Here
Understanding the 5/6 ARM Pro is the first step. Putting it to work in a way that aligns with your goals? That’s how you build momentum from one deal to the next. When you match the loan to your broader strategy, you gain the kind of control and clarity that drives long-term success.
Ultimately, that’s why we quickly turned this promotional product into a core service offering. Investors were using it strategically across a wide range of scenarios, and seeing results. It was clear this wasn’t just a short-term solution. It was something worth building on.
If you’re planning your next move, the 5/6 ARM Pro could be the solution that keeps your strategy on track.
Have a deal in the works? Let’s talk strategy and see if the 5/6 ARM Pro is the right fit.
