ARM LOANS

When you get a mortgage, you can choose a fixed-rate or adjustable-rate mortgage, known as an ARM. While fixed-rate mortgages keep the same interest rate for the life of the loan, adjustable-rate mortgages have fluctuating rates.

What is an adjustable-rate mortgage?
An adjustable-rate mortgage, or ARM, is a home loan with an interest rate that can change periodically. This means that the monthly payments can go up or down. Generally, the initial interest rate is lower than that of a comparable fixed-rate mortgage. After that period ends, interest rates and your monthly payments — can go lower or higher.

​The main reason to consider adjustable rate mortgages is that you may end up with a lower monthly payment because you’re taking the risk that interest rates could rise in the future. However, if rates fall, you can refinance and get a better rate.