PenFed Offering Reset Deals?

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SteelyEyed
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Joined: Sun Jun 14, 2009 10:34 am

PenFed Offering Reset Deals?

Post by SteelyEyed »

I have a PenFed 5/5 ARM from 2018 ($180k left on a value of ~$800k). Yes, I probably should have refinanced since then. Anyway, this is the forever home, so there is a very low probability of selling. The current rate is 3.125% and the reset calculation is performed in December and becomes effective in early 2023. It has the typical 2% cap in increase every 5 years and a cumulative cap of 5% increase. It looks like it will definitely hit the 2% cap this time around, for a new rate of 5.125%. Is PenFed still offering discounts to commit to keeping the loan with them or have they changed tactics now that rates keep increasing?
BruDude
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Location: Las Vegas

Re: PenFed Offering Reset Deals?

Post by BruDude »

I'd be surprised if they offered any deal since the 2% increase is now still 1.5% below current market rates (not sure what yesterday's decision did yet). They usually only offer those deals when market rates are lower than the cap reset rate.
exodusNH
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Re: PenFed Offering Reset Deals?

Post by exodusNH »

SteelyEyed wrote: Thu Sep 22, 2022 8:20 am I have a PenFed 5/5 ARM from 2018 ($180k left on a value of ~$800k). Yes, I probably should have refinanced since then. Anyway, this is the forever home, so there is a very low probability of selling. The current rate is 3.125% and the reset calculation is performed in December and becomes effective in early 2023. It has the typical 2% cap in increase every 5 years and a cumulative cap of 5% increase. It looks like it will definitely hit the 2% cap this time around, for a new rate of 5.125%. Is PenFed still offering discounts to commit to keeping the loan with them or have they changed tactics now that rates keep increasing?
It probably makes sense to start paying down the principal, even if that means you contribute less to your taxable brokerage account. That will be a risk-free, after tax return of 5.125% (6.6% pretax return, which isn't too far off from the historical returns of a 60/40 portfolio.)
manuvns
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Re: PenFed Offering Reset Deals?

Post by manuvns »

just take what they are offering if your rate is 3% wait until 5 year is complete and rate to adjust then . You can do better by not paying off the mortgage in long run .
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SteelyEyed
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Re: PenFed Offering Reset Deals?

Post by SteelyEyed »

Thanks. I figured it wouldn't be rational for them to still be offering those deals, given the current rates. I was hoping somebody would have either received an offer recently or had gone through a reset and not received one, for confirmation one way or the other.
rascott
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Re: PenFed Offering Reset Deals?

Post by rascott »

Not even sure they are offering this product anymore. Sorry you were sitting still when you had probably 18 months when you could have easily gotten a fixed rate at or even well below the 3.125%. I dropped this product in fall of 2020 for a 2.625% fixed.
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