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When you apply for an adjustable-rate mortgage with First National Bank and Trust (FNBT) decisions are made in-house. We're committed to providing you with the highest level of customer service. If you’d like to get an idea of how much home you can afford or what your payments might be, check out our home loan calculators. 

What Is An Adjustable-Rate Mortgage (ARM)?


An adjustable-rate mortgage (ARM) is a home loan with a variable interest rate. Usually, the initial borrowing costs of an ARM are fixed at a lower introductory rate for a period of time. After that, the interest rate applied on the outstanding balance resets periodically and may affect your monthly payments which can increase or decrease, depending on the state of the economy and general cost of borrowing.

Is An Adjustable-Rate Mortgage Right For You?


An ARM loan can be a smart financial choice if you are planning to keep the loan for a limited period of time and will be able to handle any rate increases in the meantime. For example, if you are buying your first home and plan to move again in a few years, or if you want to take advantage of the low introductory rate and then plan to refinance after the introductory period ends.

Why Get Pre-Qualified?


Getting pre-qualified for a mortgage loan is an important first step in your journey to home ownership. In fact, many real estate agents will ask you for a pre-qualification letter before they will take you out to look at homes. Being pre-qualified can also improve your chances of having an offer accepted by sellers. 

Sit down with one of our mortgage lenders at one of our Southern Wisconsin or Northern Illinois locations. We’ll review your financial situation, homebuying goals, and the home loan options available to you. 

Apply Now For An Adjustable-Rate Mortgage! 


Home is where dreams are made. Ready to apply for an adjustable-rate mortgage? Contact us to get started! To apply for a mortgage in person, visit us at any one of our convenient locations in Beloit, Clinton, Darien, Delavan, Janesville, Monroe, and Walworth, WI and Rockton, Roscoe, and Winnebago, IL.

The regulators that oversee LIBOR have stated that they can’t guarantee LIBOR will be available beyond June 2023, since the index is based on transactions that don’t occur as often as they did in previous years. Banks, financial institutions and governments across the globe have been working to identify options for replacing the  LIBOR Index.

An index based on SOFR will be used to determine the interest rate when your loan has its regular interest rate adjustment after June 2023. Your interest rate will continue to be based on the LIBOR index until then.

No. All loans and other financial products that are based on the LIBOR Indexd are affected.

We’re collaborating with other lenders, servicers, our regulators, our investors and consumer advocacy groups through the Alternative Reference Rates Committee (ARRC) to develop a transition plan to the SOFR index. 

The Alternative Reference Rates Comittee (ARRC) is a group of private market participants created by the Federal Reserve to help ensure a successful transition from LIBOR to a replacement index. Learn more at their website: https://www.newyorkfed.org/arrc(Opens Overlay.

No. New adjustable-rate mortgage (ARM) loans at FNBT will be based on the SOFR index. 

If the index is no longer available, the original loan documents (specifically the note), allow for the index of an adjustable rate mortgage to change.

A new mortgage is not necessary for the index change, however, it may be a good time to review your mortgage to make sure it still meets your financial needs. Consider getting a new mortgage If you can benefit from a lower interest rate, if your financial goals have changed,or you’re looking for a fixed payment.

No. Fixed-rate mortgages will not be directly impacted by the LIBOR index transition.

We want to ensure you stay informed during this transition, so FNBT will:

  • Post updated information to bankatfirstnational.com as it becomes available.
  • Mail information as the transition to the new index gets closer.
  • When your loan is updated to the SOFR index, we will send updates by mail and email to inform you of the new interest rate and payment effective dates.
If you’re experiencing financial difficulty, or are concerned about your ability to make payments, please contact us to assist you with options.

For most adjustable-rate mortgage loans, SOFR (Secured Overnight Financing Rate) is the recommended replacement rate by the Alternative Reference Rates Committee (ARRC). FNBT will inform you of all changes to your loan, including the replacement rate.

See the ARRC website: https://www.newyorkfed.org/arrc(Opens Overlay for more information on the discontinuation of the LIBOR Index,

After June 2023, the SOFR index will be used to determine the interest rate when your loan has its regular interest rate adjustment . Your interest rate will continue to be based on the LIBOR index until then.
All other details concerning your ARM loan will remain the same.

No. Your interest rate adjustment timing will not change.

With any ARM loan, the interest rate (and therefore payment) can increase whenever you have a scheduled interest rate adjustment. However, First National Bank and Trust, along with the Alternative Reference Rates Committee (ARRC) have made every effort to minimize the direct affect the change from LIBOR to SOFR will have on your payment.