Does Silt offer ARMs?

The DSCR program is a 30-year loan, fixed, with an optional 10-year interest-only period.

At the start, usually. After the fixed period it is index plus margin, within caps.

The fixed spread added to the index. It never changes for the life of the loan.

Can I refinance out before the reset?

That is the plan an ARM depends on — and it is not guaranteed by anyone.

Which lowers my payment more, IO or an ARM?

Depends on the quotes. Interest-only does it without reset risk.

LESSON 5 OF 64 MIN READ

Fixed or ARM for a rental property?

A fixed rate keeps your payment the same for thirty years; an ARM starts lower and then resets periodically to an index plus a fixed margin, within caps. Silt's DSCR program is a thirty-year loan offered fixed or with a ten-year interest-only period, so the fixed structure is the working default here — but understanding ARM machinery still matters, because much of the market quotes them and the comparison is easy to get wrong. The deciding question is whether your hold period is shorter than the fixed period of the ARM.

THE NUMBERS

Minimum DSCR	0.75 (0.75–0.99 prices at +62.5 bps, 70% LTV cap)
Maximum LTV	80% purchase or rate-and-term · 75% cash-out
FICO floor	660 (below that the desk does not lend)
Loan size	$100K – $3M single · $10M portfolio
Reserves	6 months PITIA · 12 months on a portfolio
Prepay options	5-4-3-2-1 par · 3-2-1 +25 bps · 1-yr +50 bps · none +87.5 bps
Typical days to close	21–30 days from a signed term sheet
Rate sheet	Silt Rate Desk — Market Composite Sept 2026 · effective 2026-09-01

ILLUSTRATIVE — published program floors, not a quote or a commitment to lend. Subject to underwriting, appraisal and final credit approval.

The three parts of an ARM

An index — a published market rate that moves. A margin — a fixed spread the lender adds, which never changes for the life of the loan. And caps — limits on how far the rate can move at the first adjustment, at each subsequent adjustment, and over the life of the loan, usually written as three numbers such as 2/1/5. Your rate after the fixed period is index plus margin, constrained by the caps. The teaser rate you were quoted has no bearing on it.

How to read a 5/6 or 7/6

The first number is the years of fixed rate; the second is how often it adjusts afterwards, in months. A 7/6 ARM is fixed for seven years, then resets every six months. Market practice on index choice and margin varies by lender, so two ARMs with the same headline can behave very differently after the fixed period — compare the margin and the caps, not the teaser.

The case for an ARM

It is a hold-period bet. If you are confident the property will be sold or refinanced inside the fixed period, the lower starting rate is money in your pocket and the reset never happens to you. It also produces a lower payment and therefore a higher DSCR at qualification, which can be the difference on a thin file. Both benefits depend on an exit that you control and that the market permits.

The case for fixed

A rental is a long-duration asset with a payment schedule you would like to match. A fixed rate makes the largest line in your operating budget knowable for thirty years, and it converts interest-rate risk into someone else's problem. Plans slip, refinances get harder exactly when rates rise, and the reset lands anyway. For a buy-and-hold investor, fixed is the structure that matches the strategy.

What Silt offers

A thirty-year loan, fixed, with an optional ten-year interest-only period at 25 basis points. If the goal behind the ARM question is a lower payment for qualification, the interest-only structure achieves it without the reset risk — and that is usually the right conversation to have. If a specific ARM structure is genuinely what your strategy needs, tell the desk what the exit is and it will tell you honestly whether the sheet fits.

Comparing an ARM quote honestly

Ask four questions: which index, what margin, what caps, and what the fully indexed rate would be if the loan reset today. That last number is the useful one — it is what you would be paying if the fixed period ended now. Then compare it with the fixed quote. A great many ARMs look attractive only until that number is on the page.

Reading an ARM quote

Structure	7/6 ARM
Start rate	6.375% for 84 months
Index + margin	Index plus 3.00% thereafter
Caps	2 / 1 / 5
Worst case at first reset	8.375%
Worst case lifetime	11.375%
Comparable 30-year fixed	6.875%
The real question	Will the property be sold or refinanced before month 84?

Illustrative market structure for comparison. Silt's DSCR program is a 30-year loan, fixed, with optional 10-year interest-only. Not a quote.

WHAT WE NEED FROM YOU

Your hold plan. The ARM decision is entirely a hold-period question.
Nothing else extra. Structure choice does not change the document list.

FREQUENT QUESTIONS

Does Silt offer ARMs?: The DSCR program is a 30-year loan, fixed, with an optional 10-year interest-only period.
Is an ARM cheaper?: At the start, usually. After the fixed period it is index plus margin, within caps.
What is a margin?: The fixed spread added to the index. It never changes for the life of the loan.
Can I refinance out before the reset?: That is the plan an ARM depends on — and it is not guaranteed by anyone.
Which lowers my payment more, IO or an ARM?: Depends on the quotes. Interest-only does it without reset risk.

Apply

Interest-only Current rates Program guidelines All answers