Oxford Lending Group cuts 7-year ARM rate

Keychain shaped like a house with 2 keys

Oxford Lending Group LLC is offering one of the best deals in the country on seven-year, adjustable-rate mortgages.

As of June 9, the online lender based in Columbus, Ohio, is charging just 3.875%, with no points and a low $995 in fees.

That's almost half a percentage point lower than the national average for seven-year ARMs.

The offer is widely available, with Oxford Lending Group licensed in 38 states.

The principal and interest payments for the first five years would be $470 a month for every $100,000 you borrow.

Some lenders offer ARMs with lower rates. But check their interest rate caps before you sign up.

The rates on some bargain-basement loans can go up as much as five percentage points when they reset for the first time.

This Oxford Lending Group ARM won't do that.

Its interest rate caps are 2/2/6, which means it can't go up more than two percentage points the first time it adjusts in five years, or two percentage points each year after, and it can never go up more than six percentage points.

Of course, this kind of loan makes the most sense if you plan to sell the home before the mortgage resets. A seven-year ARM like this one gives you more time than adjustable-rate mortgages that reset more quickly.

But just in case you don't sell before then introductory rate expires, you need an ARM you can still afford even if the payments go up.

Interest rates are at historic lows, and you have to assume they'll be higher a few years from now.

To qualify for this loan, you need a credit score of 700 or higher. You must also be applying for a conforming loan -- one for less than $417,000 to $729,500, depending on where you live.

Click here to compare this deal with the best mortgage rates from scores of other lenders in your area.