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  Coronavirus Update

We are offering a SBA Paycheck Protection Program to support our business customers. Read More

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. Among other forms of economic aid, the CARES Act provides businesses affected by COVID-19 with special assistance programs. One such Small Business Administration (SBA) program is the Paycheck Protection Program, which assists businesses with job retention and specific expenses. Spencer Savings Bank is proud to partner with FOUNTAINHEAD Commercial Capital / Small Business Finance, a top national SBA lender, to offer the Paycheck Protection Program for businesses in need. Please click on the link below to be directed to Fountainhead’s website where you can learn more about the Paycheck Protection Program and apply.

When completing the application, please indicate Spencer Savings Bank as the FastTrack Partner, and as the Referral Partner’s email address.

Spencer Savings Bank is committed to the safety, health and well-being of its customers and employees. As the country continues to deal with the impact of the Coronavirus (COVID-19), we want to take a moment to assure the community that we are closely monitoring the situation which is continuously evolving.

In response to the latest situation regarding this public health crisis, we are temporarily modifying how we conduct business at our financial centers to help minimize the potential spread of the virus. Effective Monday, March 30, 2020, we will be providing lobby service in our financial centers by appointment only. To make an appointment, please call the financial center between the hours of 9:00am – 5:00pm, Monday – Friday and 9:00am – 1:00pm on Saturday. Financial centers with a drive-up facility will continue to operate as usual during the same hours listed above, Monday- Saturday. In the best interest of the public health, if you need to process a teller transaction and your financial center has a drive-up facility, we are asking you to process all teller transactions at the drive-up only. Please know that every effort is being taken to ensure that the bank is able to meet all of your needs while we continue to follow the recommendations from the health authorities.

In addition to taking extra precautions to maintain the cleanliness of our bank locations, we continue to update and educate employees on virus information, as well as reduce employee contact. Please know that the bank has a Pandemic Plan in place with procedures and guidelines for the staff to follow to continue with all business activity.

We would like to take this opportunity to remind customers that most banking transactions do not require a visit to an office. Spencer offers a variety of ways to access your accounts and manage your money without having to visit a financial center. Banking can continue from the comfort of your own home. Most transactions can be handled with a call to our Customer Service Center, with your mobile device, online or at an ATM. Many locations also offer drive through features. All of these options reduce public interaction for both the customer and employee. If you want to explore any of these options, please call your local financial center or our Customer Service Center at 1-800-363-8115.

We also urge all customers to be extra vigilant during this time as there are increased incidents of fraud surrounding the virus announcement. The FDIC has released educational articles regarding this topic with more information.

This is a fluid and evolving situation. We will continue to update you with any new information that becomes available. Our customers are the heart of our business. Thank you for giving us the opportunity to continue to serve you. Together, we will all take the necessary precautions to successfully manage through this difficult time.


A mortgage that does not have a fixed interest rate. The rate changes during the life of the loan based on movements in an index rate, such as the rate for Treasury securities or the Cost of Funds Index. ARMs usually offer a lower initial interest rate than fixed-rate loans. The interest rate fluctuates over the life of the loan based on market conditions, but the loan agreement generally sets maximum and minimum rates. When interest rates increase, generally your loan payments increase; and when interest rates decrease, your monthly payments may decrease.

The cost of credit expressed as a yearly rate. For closed-end credit, such as car loans or mortgages, the APR includes the interest rate, points, broker fees, and other credit charges that the borrower is required to pay. An APR, or an equivalent rate, is not used in leasing agreements.

A large extra payment that may be charged at the end of a mortgage loan or lease.

When the seller pays an amount to the lender so that the lender can give you a lower rate and lower payments, usually for an initial period in an ARM. The seller may increase the sales price to cover the cost of the buydown. Buydowns can occur in all types of mortgages, not just ARMs.

A limit on the amount that your interest rate can increase. The two types of interest rate caps are periodic adjustment caps and lifetime caps. Periodic adjustment caps limit the interest-rate increase from one adjustment period to the next. Lifetime caps limit the interest-rate increase over the life of the loan. All adjustable-rate mortgages have an overall cap.

A limit on the amount that your monthly mortgage payment on a loan may change, usually a percentage of the loan. The limit can be applied each time the payment changes or during the life of the mortgage. Payment caps may lead to negative amortization because they do not limit the amount of interest the lender is earning.

A provision in some ARMs that allows you to change the ARM to a fixed-rate loan at some point during the term. Conversion is usually allowed at the end of the first adjustment period. At the time of the conversion, the new fixed rate is generally set at one of the rates then prevailing for fixed-rate mortgages. The conversion feature may be available at extra cost.

In an ARM with a discounted initial rate, the lender offers you a lower rate and lower payments for part of the mortgage term (usually for 1, 3, or 5 years). After the discount period, the ARM rate will probably go up depending on the index rate. Discounts can occur in all types of mortgages, not just ARMs.

In housing markets, equity is the difference between the fair market value of the home and the outstanding balance on your mortgage plus any outstanding home equity loans.

These ARMs are a mix—or a hybrid—of a fixed-rate period and an adjustable-rate period. The interest rate is fixed for the first several years of the loan; after that period, the rate can adjust annually. For example, hybrid ARMs can be advertised as 3/1 or 5/1—the first number tells you how long the fixed interest-rate period will be and the second number tells you how often the rate will adjust after the initial period. For example, a 3/1 loan has a fixed rate for the first 3 years and then the rate adjusts once each year beginning in year 4.

The economic indicator used to calculate interest-rate adjustments for adjustable-rate mortgages or other adjustable-rate loans. The index rate can increase or decrease at any time.

The rate used to determine the cost of borrowing money, usually stated as a percentage and as an annual rate.

Interest-only ARMs allow you to pay only the interest for a specified number of years, typically between three and 10 years. This arrangement allows you to have smaller monthly payments for a prescribed period. After that period, your monthly payment will increase— even if interest rates stay the same—because you must start paying back the principal and the interest each month. For some I-O loans, the interest rate adjusts during the I-O period as well.

The number of percentage points the lender adds to the index rate to calculate the interest rate of an adjustable-rate mortgage (ARM) at each adjustment.

Occurs when the monthly payments in an adjustable-rate mortgage loan do not cover all the interest owed. The interest that is not paid in the monthly payment is added to the loan balance. This means that even after making many payments, you could owe more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments that are not high enough to cover the interest due or when the minimum payments are set at an amount lower than the amount you owe in interest.

An ARM that allows the borrower to choose among several payment options each month. The options typically include (1) a traditional amortizing payment of principal and interest, (2) an interest-only payment, or (3) a minimum (or limited) payment that may be less than the amount of interest due that month. If the borrower chooses the minimum-payment option, the amount of any interest that is not paid will be added to the principal of the loan. See also the definition of negative amortization, above.

One point is equal to 1 percent of the principal amount of a mortgage loan. For example, if the mortgage is $200,000, one point equals $2,000. Lenders frequently charge points in both fixed-rate and adjustable-rate mortgages to cover loan origination costs or to provide additional compensation to the lender or broker. These points usually are paid at closing and may be paid by the borrower or the home seller, or may be split between them. In some cases, the money needed to pay points can be borrowed (incorporated in the loan amount), but doing so will increase the loan amount and the total costs. Discount points (also called discount fees) are points that the borrower voluntarily chooses to pay in return for a lower interest rate.

Extra fees that may be due if you pay off your loan early by refinancing the loan or by selling the home. These fees are not allowed for ARMs or for high-cost mortgages. For mortgages where they are allowed, the penalty cannot go beyond the first three years of the loan’s term.

The amount of money borrowed or the amount still owed on a loan.