Adjustable-Rate Mortgage (ARM)

An Adjustable-Rate Mortgage (ARM) is a type of home loan where the interest rate can change over time. Initially, ARMs often have a lower fixed rate for a set period, such as 5 or 7 years, after which the rate adjusts periodically based on market conditions. This means your monthly payments may increase or decrease, depending on interest rate changes. While ARMs can start with lower initial payments, they carry the risk of rising costs in the future, so it’s important to understand the terms and how they may affect your budget over time.