An ARM loan is an adjustable rate mortgage. ARM loans have a fixed introductory interest rate that lasts a set period of time and adjusts annually thereafter for the remaining time period. After the fixed time period your interest rate will change and so will your monthly payment.

i.e.

  • 10/1 ARM: Your interest rate is fixed for 10 years and then adjusts for 20 years.
  • 7/1 ARM: Your interest rate is fixed for 7 years then adjusts for 23 years.
  • 5/1 ARM: Your interest rate is fixed for 5 years then adjusts for 25 years.