Adjustable Rate Mortgage

An Adjustable Rate Mortgage (ARM) is a home loan that begins with a fixed interest rate for an initial period, typically five to seven years, before transitioning to a variable rate that adjusts at set intervals. ARMs often provide lower initial interest rates and reduced monthly payments compared to fixed-rate mortgages, making them an attractive option for borrowers seeking short-term savings or planning to move before the adjustment period begins. Once the fixed term ends, both the interest rate and monthly payments may fluctuate based on market conditions.