mortgage

What is an adjustable-rate mortgage?

 

What is an adjustable-rate mortgage?

The Bankrate.com financial term of the day is: "adjustable-rate mortgage."
An adjustable-rate mortgage is also known by the acronym "ARM" -- which is appropriate, because it's a mortgage that can flex. The interest rate changes, or adjusts, periodically in sync with a standard financial index. ARMs can grab you because there's usually an initial period of a certain number of years when your interest rate won't change and will be lower than what you'd get with a comparable fixed-rate mortgage. Most adjustable-rate mortgages also have caps on how much the interest rate may increase when it does eventually start moving.

An adjustable-rate mortgage, or ARM, tempts you with a low interest rate, but watch out because that rate may not last.

To shop for a great mortgage rate, visit the rate tables at Bankrate.com.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CAR & MONEY NEWSLETTER

Get cost-cutting tips for buying, selling and maintaining your wheels. Delivered monthly.

advertisement
Partner Center
advertisement

Blog

Tara Baukus Mello

Got cars? You’ll log more miles

The average number of miles logged annually per car within a household is the most in a two-car home, where the average car travels 11,800 miles, and 36 percent of households have two cars.  ... Read more


Connect with us