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Debt Consolidation > Debt Consolidation Help > Financial Terms Glossary > ARM - Adjustable Rate Mortgage
 

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ARM - Adjustable Rate Mortgage

 
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This is a type of home loan where the interest rate changes periodically based on a standard financial index. ARM’s intially offer lower interest rates but you incrue the risk of the interest rate increasing in the future.

A fixed rate mortgage (FRM) is a the standard type of mortgage that offers a higher rate but will not change for the length of the loan. Typically ARMs will have a cap on how much the interest rate can increase or decrease.

 

 

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