Adjustable Rate Mortgage

Adjustable rate mortgages have an interest rate that is adjusted at certain intervals based on a specific index during the life of the loan.

It has a fluctuating interest rate that depends on market conditions and lender terms. Many ARM products have a fixed rate for the first few years then reset to variable rates, sometimes with a cap. If you don’t plan to stay in your home for more than a few years, this could save you on interest rate payments.