National Bank of Arizona has improved the traditional adjustable-rate mortgage, turning it on its head to benefit home buyers for up to 10 years.

With interest rates fluctuating, the bank has modified a program that allows customers who already have a relationship with the bank to shave off a fraction of a percentage point on their mortgage and keep it at that lower percentage for up to a decade.

Traditionally, the interest rate on an adjustable-rate mortgage (ARM) resets as often as every two years, but the ARM available through what’s called “relationship pricing” at NB|AZ does not. It functions more like a fixed-rate product, but with a significantly lower interest rate than is available for an actual fixed-rate loan.

With relationship pricing, “we offer two tiers for existing clients,” says John Anguiano, vice president, mortgage production manager at NB|AZ. The first tier is for customers who have at least two core products—such as checking, savings, money market or credit cards, among other products—and at least $50,000 in core product balances.

Prior to interest rates rising last year, the minimum threshold for this tier was $250,000. “We wanted to open this up to a whole new group of customers who find it easier to have a $50,000 relationship rather than a lot more,” Anguiano says.

Although the rate reduction fluctuates, customers with at least $50,000 connected to NB|AZ may receive a quarter-point reduction on an already low rate on an adjustable-rate mortgage. This program is available for all of NB|AZ’s portfolio mortgage products, including one-time close loans (construction loans that convert to an adjustable-rate mortgage), new purchase and refinance mortgage programs.

According to Anguiano, if a customer has $750,000 or more connected to NB|AZ through deposits, loans and investments, they would receive a slightly larger reduction on their mortgage interest rate. “The discount takes place for the fixed period of the ARM,” he says, explaining that the interest rate on a 10-year ARM will remain the same for the initial 10 years of the loan. “Right now, our 5-, 7- and 10-year ARMs all have the same rate, so most clients are choosing the 10-year loan.”

After that period of time, the client can expect the interest rate to adjust or refinance into a new loan. Because most mortgage holders maintain their loan for an average of only seven years (either they refinance, pay off the loan or move to another residence), an ARM such as this could be a perfect option for many homebuyers, says Anguiano.

A typical rate lock on the purchase of a new home—where a mortgage interest rate is locked in and can’t rise—is 45 to 60 days. But NB|AZ has developed a rate lock for customers waiting for a new home to be built by a production builder that can extend for up to 270 days. So while your new home is being built, you’ll know you’ve got a rate locked in for most or all of the time it takes to complete construction.

“This provides some stability to the customer, to shield them from a potentially much higher rate once the home is completed and ready for move-in,” Anguiano says, adding that the program also has a built-in “float-down” process, wherein if rates drop before the home is completed, the customer can secure a lower rate. Your mortgage will be an adjustable-rate product where the interest rate will stay the same typically for 10 years.

“At National Bank of Arizona,” Anguiano continues, “we like to believe that we are a relationship-based bank and are always looking for ways that will benefit our customers, especially those who have a banking relationship with us.”