Street Capital has rolled out the first nationally available 1-year adjustable rate mortgage.

Paul Grewal, President of Street Capital, says the product is well-suited to those who expect that “discounts on ARM’s will increase.” It gives people “the flexibility to choose a shorter ARM term,” he adds.

Therefore, if you think variable rates will be prime – 0.50% next year, for example, this 1-year variable lets you switch mortgages in 12 months without penalty–instead of waiting 3-5 years.

Street Capital also lets customers convert to a 3-, 4- or 5-year fixed rate at any time, with no fee, and at discounted broker rates.

From a strategic standpoint, it’s a great move by Street.  The 1-year term has a clear value proposition in the current market.  More importantly, it gets customers in the door—many of which will renew with Street in a year, or lock into a long-term fixed rate.

Here are some of the key guidelines:

• LTV: Up to 95% on purchases and 90% on refinances
• Rate Hold:  60 days
• Amortizations:  16-35 years
• Compounded:  Semi-annually
• Loan Amounts:  $50,000 to $1,500,000
• Qualifying Rate:  3-year discounted rate or contract rate
• Minimum Beacon Score:  600
• Early Termination Penalty:  3 months of interest
• Lump-sum Pre-payments:  20% annually
• Payment Increase Option:  20% annually

Rate premiums apply on conventional mortgages between 75%-80% LTV, rentals, stated income deals, and discharged bankrupts.

In conjunction with today’s announcement, Street Capital also announced a new 3-year variable.