Adjustable-Rate Mortgage (ARM)

Start with lower payments and adjust as needed.

An ARM starts with a lower interest rate for a set period (usually 5, 7, or 10 years), then adjusts periodically based on market rates. This option may offer initial savings but carries risk if rates rise.

Features:

• Lower initial rate than fixed mortgages

• Adjustable after initial term

• Typically tied to an index (e.g., SOFR, LIBOR)

• Caps can limit increases

Best For:

Buyers planning to sell or refinance within 5–10 years.