Adjustable Rate Mortgages

DEFINITION of ‘Adjustable-Rate Mortgage – ARM’. An adjustable-rate mortgage (arm) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. Normally, the initial interest rate is fixed for a period of time, after which it resets periodically, often every year or even monthly.

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.

Types of adjustable rate mortgages. An ARM is often written as a pair of numbers – for instance, “3/1 ARM”, “5/1 ARM”, “7/1 ARM” or “10/1 ARM.” The first number indicates the number of years the interest rate will remain fixed. The second number indicates the adjustment period of the loan, or how many years it will be before.

If starting out with a lower monthly payment is important to you, then you may wish to consider an Adjustable Rate Mortgage (ARM). An ARM loan typically offers you an attractive interest rate for the first several years of your loan, then it adjusts annually for the remainder of your mortgage term.

An adjustable rate mortgage (ARM) is a type of mortgage that is just that-adjustable. That means, while you may start out with a low interest rate, it can go up.

The average fee for the 15-year mortgage rose to 0.6 point from 0.5 point. The average rate for five-year adjustable-rate.

An Adjustable Rate Mortgage, or ARM, generally begins with an interest rate that is 2% to 3% below a comparable fixed-rate mortgage. The interest rate may adjust to a higher or lower percentage over the life of the loan as market conditions change.

An adjustable-rate mortgage has rates that may go up or down on a regular basis. ARMs begin with a set interest rate for a specified period of time, then the rate is adjusted periodically after that.

5 1 Arm Mortgage Definition Known as a "hybrid" loan, a 5/1 ARM involves a fixed interest rate for the first five years and a variable rate that changes every year thereafter. Hybrid ARMS bring payment uncertainty after the initial fixed period.

Adjustable-rate mortgages (ARMs), also known as variable-rate mortgages, have an interest rate that may change periodically depending on changes in a corresponding financial index that’s associated with the loan. Generally speaking, your monthly payment will increase or decrease if the index rate goes up or down.

Current Adjustable Rate Mortgages 30-year fixed mortgage rates remain flat; current Rate is 3.53%, According to Zillow Mortgage Rate Ticker – while the rate for a 5-1 adjustable-rate mortgage (ARM) is 2.76 percent. Below are current rates for 30-year fixed mortgages by state. Additional states’ rates are available at:.