With an Adjustable-Rate Mortgage (ARM), your interest rate changes periodically, based on market conditions and the current rate environment. For many borrowers, that’s a big advantage because the initial interest rate will almost always be lower than with a fixed-rate mortgage.

Also known as a variable rate mortgage, the ARM's rate stays fixed for a set period of time (3, 5, 7, or 10 years), but then can adjust yearly thereafter, upward or.

Adjustable-rate mortgage (ARM) Lower initial interest rate and monthly P&I payments than on a fixed-rate mortgage with a comparable term. Rates and monthly payments can change after the initial fixed-rate period. Jumbo loans For customers who need financing for higher loan amounts:

Adjusted Rate Mortgage The difference between a fixed rate and an adjustable rate mortgage is that, for fixed rates the interest rate is set when you take out the loan and will not change. With an adjustable rate mortgage, the interest rate may go up or down.Definition Adjustable Rate Mortgage The interest rates of variable and adjustable rate loans change over time. Shopping for the best mortgage loan is a lot more difficult than shopping for groceries, but if you understand some of the phrases and terms used, it will be easier to make a decision.

Learn about the adjustable rate mortgage, including definition, how it compares to fixed rate mortgages, advantages and more.

Arm Mortgage Definition 3 Reasons an ARM Mortgage Is a Good Idea — The Motley Fool – 3 Reasons an ARM Mortgage Is a Good Idea. the lowest rate advertised on a major mortgage site for a 5/1 ARM was about 3.2% compared to a rate of 3.9% for a 30-year fixed loan.

A year earlier, the 30-year mortgage was 4.6%. The 15-year fixed-rate mortgage rose to 3.20% from 3.18%, and the 5-year.

An adjustable rate mortgage (ARM) may help you save money in the short term. Generally, an ARM has lower monthly principal and interest payments during the initial fixed interest rate period. 1 Later, your interest rate will be variable and will adjust annually if the index changes.

An adjustable-rate mortgage (ARM) is a loan in which the interest rate may change periodically, usually based upon a pre-determined index. The ARM loan may include an initial fixed-rate period that is typically 3 to 10 years.

Adjustable Rate Mortgage - Is Now The Right Time? A simple adjustable-rate mortgage definition is: a mortgage whose interest rate can change over time. Here’s how it works: It starts off very similar to a fixed-rate mortgage. With an ARM you commit to a low interest rate for a given term, usually 3, 5, 7 or 10 years depending on the loan you choose.

Adjustable-rate mortgages can provide attractive interest rates, but your payment is not fixed. This adjustable-rate mortgage calculator helps you to approximate your possible adjustable mortgage.

Sub Prime Mortgage Meltdown Subprime mortgage: Subprime mortgage, a type of home loan extended to individuals with poor, incomplete, or nonexistent credit histories. Because the borrowers in that case present a higher risk for lenders, subprime mortgages typically charge higher interest rates than standard (prime) mortgages.

The inverted yield curve isn’t just spooking people over a possible recession – it’s doing weird things to mortgage rates, too. Traditionally, adjustable-rate mortgages, or ARMs, offer lower interest.

A year ago at this time, the 15-year FRM averaged 3.98 percent. 5-year treasury-indexed hybrid adjustable-rate mortgage (ARM).