Pentagon Federal Credit Union’s Mortgage Rates vs National Avg.

June 13, 2010 2 Comments »

Pentagon Federal Credit Union, the third largest credit union in the United States by both membership and assets, is currently offering mortgage rates which are slightly lower than the national average(s). Although PFCU is based in Virginia, they can accept members from other states. For further info on membership eligibility you can view their membership page at PenFed.org.

Their most notable mortgage offer is a 5/5 jumbo adjustable rate mortgage “Special” which is only available for a limited time. PenFed claims that this low of a rate is only found with an adjustable rate mortgage however, this promotion comes with the stability of a fixed rate mortgage as well. The current interest rate on this special offer is 3.875% APR. The current national average for a 5/1 ARM’s sit at around 3.90% APR.

Related: 5 Things to Consider Before Choosing a Credit Union.

Details of 5/5 jumbo adjustable rate mortgage:

  • Adjustable Rate Mortgage with a 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

All mortgage rates offered through Pentagon Federal Credit Union:

(Adjustable Rate Mortgages)

- 1/1 ARM conforming loan 3.097% APR with 0.00 Points

- 3/1 ARM conforming loan 3.21% APR with 0.375 Points

- 5/1 ARM conforming loan 3.33% APR with 0.375 Points

- 7/1 ARM conforming loan 3.71% APR with 0.750 Points

- 10/1 ARM conforming loan 4.207% APR with 0.750 Points

The current national average for 5/1 and 3/1 ARM loans are 3.82% APR, 4.22% APR respectively.

(Fixed Conventional Mortgage Loans)

- 30-year fixed conforming loan 4.718% APR with 1.50 Points

- 20-year fixed conforming loan 4.673% APR with 1.50 Points

- 15-year fixed conforming loan 4.269% APR with 1.50 Points

- 10-year fixed conforming loan 4.472% APR with 1.50 Points

The current national averages for 30-year fixed and 15-year fixed are 4.83 APR and 4.26% APR respectively.

Related: Before you close a new home loan see how much you should be paying in closing costs.

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  • Dan

    Too bad their home loan unit is overloaded and underskilled. I had a transaction go bad because the PenFed folks would not process my loan in a timely manner. Almost no communication either. So much for the benefit of a 45-day lock over a 30-day lock, when it takes them 3 weeks to even look at your application. “Your application is not yet at the top of our queue”. And after 2 months when they were “processing” my application they suprise me with a huge appraisal fee and a flood insurance requirement (I am NOT in a flood zone).

    This rant could go on for pages. Suffice to say, I would NOT recommend loans from PenFed especially for somthing as important as your house. Find a local lender you can trust that you know will follow through in a timely fashion, even if it means paying a little more.

  • Ram

    Right now their 5/5 is a very poor deal.

    Their first 5 years are at 4%, and the remaining 25 years (when the rate will be reset), is set at 3.25%

    This lets them claim a 3.5x % APR … but the point of a 5/5 rate is the rate in the first five years (with some control on future rates).