Union Bank Offers New Two-Step Mortgage Loan

Union Bank of California N.A., has introduced a new mortgage product, called a two-step mortgage, that is available for any loan amount up to $5 million – and higher on a case-by-case basis.

The loan features a 40-year total term with a fixed rate of interest for the first 15 years, followed by a one-time adjustment for the remaining term. The new program is offered in California, Oregon and Washington.

Two-step mortgage borrowers can pay principal at any time on their own schedules and unlike a traditional fixed-rate mortgage, their payments will immediately decrease the following month, the company says. At the end of the 15th year, the interest rate automatically resets to the current market rate at that time and remains fixed for the next 25 years. During this period, the loan fully amortizes.


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