One of the most notable characteristics of Pentagon Federal Credit Union (PenFed) is that its selection of adjustable-rate mortgages (ARMs) contains six rather distinctive options, in addition to a whopping eight fixed-rate mortgages. The credit union also predictably offers VA loans, considering its focus on those working for the military and federal government.
PenFed, unlike many other credit unions, is open to anyone who would like to apply for a loan or open an account. You used to have to be a member of the U.S. military/uniformed services or be a U.S. federal government employee to join PenFed.
| Mortgage | Interest Rate | Points | Apply |
| 30-Year Fixed-Rate | 5.500% | 0.125 | Compare Rates |
| 15-Year Fixed-Rate | 4.750% | 0 | Compare Rates |
| 30-Year Jumbo Fixed-Rate | 6.50% | 2.875 | Compare Rates |
Overview of PenFed Credit Union Mortgages
Fixed-rate mortgages are those that hold a consistent interest rate from the day you open the loan to the day you fully pay it off. PenFed offers these in four different term lengths, ranging from 10 years to 30 years. You can get these fixed rate loans in jumbo form too (called “High Balance” at PenFed), though they’re limited to 30- and 15-year terms.
The VA loans offered by PenFed are also in 15- and 30-year terms and have similar interest rates to their conventional counterparts. Therefore the real benefit is not having to produce a significant down payment, as these loans are available for up to 100% of your new home’s value.
At PenFed, you’ll have access to some distinctive ARMs that you wouldn’t otherwise find on the market very often. For example, 15/15 and 5/5 ARMs are rarely seen because of the lengthy time periods between rate changes, though this might be a benefit for some.
What Your Monthly Mortgage Payments Could Be With PenFed Credit Union
How much you’re able to put down as the down payment on your new home will be the initial indicator of what your monthly mortgage payments will look like. For PenFed, this is expected to be about 20% of your home’s value. Your down payment is subsequently subtracted from the price of your new home, which gives you exactly how large your loan will need to be. Once this is determined, that loan will be subject to the interest rate you were approved for.
| These payment calculations do not include homeowners insurance, property taxes or closing costs. | |||
| Mortgage | Interest Rate | Loan Size | Your Payment |
| 30-Year Fixed | 5.500% | $200,000 | $1,136/month for 30 years |
| 15-Year Fixed | 4.750% | $200,000 | $1,556/month for 15 years |
| 30-Year Jumbo | 6.50% | $600,000 | $3,792/month for 30 years |
How PenFed Credit Union Compares to Other Lenders
Credit unions will almost always have better rates than typical banks and other lenders, not only when it comes to mortgages, but also checking and savings account APYs. This is because they’re significantly more exclusive than those financial institutions, and can therefore afford to offer those improved rates. In this comparison, we look at how PenFed stacks up against Navy Federal and U.S. Bank.
| Mortgage | PenFed | Navy Federal | U.S. Bank |
| 30-Year Fixed | 5.500% | 5.500% | 5.875% |
| 15-Year Fixed | 4.750% | 4.750% | 5.132% |
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Refinancing With PenFed Credit Union
Exact refinancing rates are typically hard to come by, but there are universally accepted and utilized considerations that can offer you some level of insight into what you can expect. First and foremost, how much you're looking to refinance and, in turn, your level of equity in your home are the principal factors. However, your credit score, mortgage payment history and whether the home is a primary residence or not, among other things, will also heavily come into play.
Should You Get a Mortgage from PenFed Credit Union?
Given that there are military and government employee-centric credit unions other than PenFed, it’s difficult to recommend it definitively over all competition in reference to mortgages. This is because its rates are rather lackluster and clearly leave a gap that other similar lenders have been able to fill.
With that being said, PenFed does boast a remarkable number of loan options, allowing those who are unsure of which direction they want to go plenty of choice. This not only refers to a plethora of conventional fixed, high-balance fixed and VA fixed loans, but also six different styles of ARMs and eight variations of jumbo loans.
Tips for Mortgage Newbies
- Although financial advisors are largely associated with investing, they can actually be a very useful aid in multiple facets of your life. This includes mortgages, the monthly payments that come from them and the repercussions that will likely ensue. So if you find yourself at all overwhelmed at the prospect of getting a mortgage, the SmartAsset advisor matching tool can pair you with financial advisors who serve your area.
- It's important to learn as much about mortgages and the industry that surrounds them prior to actually searching for a home and a lender. If you don't make yourself familiar with the jargon, you may find down the road that you were either taken advantage of or simply missed out on the chance for a better deal than what you chose to go with.
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