What is 5/1 ARM?
The Bankrate.com financial term of the day is: "5/1 ARM."
The term "5/1 ARM" might have you thinking of the very long limbs on a basketball player. Instead, it's a type of home loan, and one that can be a slam-dunk if you want to enjoy both the lower rates of an adjustable rate mortgage and some of the stability of a fixed. The 5/1 ARM offers a steady interest rate for the first five years. Then, the rate adjusts every one year, in line with a benchmark interest rate.
A 5/1 ARM is a hybrid mortgage loan that offers five years of a fixed rate and one-year adjustments after that.
To find a great rate on a home loan, visit the Mortgage section at Bankrate.com.