Mortgages Analyzed
Mortgages Analyzed
Mortgages Analyzed
Adjustable Rate Mortgage

What is Adjustable Rate Mortgage?

A mortgage loan in which the interest rate adjusts periodically based upon the movements of a pre-determined index or reference rate.
What It Means
ARMs allows the lender to ensure a stable return even when the interest rate in the market changes. However, the borrower is faced with periodically changing monthly payments. An example of a ARM would be HELOC that adjusts periodically whenever the prime rate changes.
Other Names
Variable Rate Mortgage

Related Terms

  • Fixed Rate Mortgage: A mortgage loan in which the interest rate remains fixed throughout the life of the loan.... Read More
  • Hybrid ARM: Hybrid ARM, which stands for Hybrid Adjustable Rate Mortgage, is a mortgage loan that has interest rate fixed for an initial term followed by adjustab... Read More
  • Home Equity Line of Credit: Home Equity Line of Credit is an open-ended adjustable rate mortgage loan that is secured by real estate and is subject to a maximum draw amount (faci... Read More
  • Home Equity Loan: Home Equity Loan is a fixed interest rate mortgage loan that is secured by the borrower's equity in the property.... Read More
  • Consumer Handbook On Adjustable-Rate Mortgages: Consumer Handbook On Adjustable-Rate Mortgages (CHARM Booklet) is an informational booklet containing general information on Adjustable Rate Mortgages... Read More


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