Adjustable-Rate Mortgages

An Adjustable-Rate Mortgage (ARM) is a type of home loan where the interest rate can change over time, typically after an initial fixed-rate period. Initially, the rate is lower than a traditional fixed-rate mortgage, saving money for the borrower. However, after the fixed period ends, the rate adjusts periodically based on market conditions, which can lead to higher monthly payments. Borrowers should understand the risks of fluctuating payments and be prepared for potential increases when considering an ARM, as it can impact overall affordability and budgeting.