Adjustable Rate Mortgage . An adjustable rate mortgage (ARM), is a loan in which the interest rate varies according to a predetermined schedule. The initial interest rate will be fixed for an allotted period of time, after which it is reset periodically. For example, a 5/1 ARM locks in the current interest rate.

Also called a variable-rate mortgage, an adjustable-rate mortgage has an interest rate that may change periodically during the life of the loan in accordance with changes in an index such as the U.S. Prime Rate or the London Interbank Offered Rate (LIBOR). Bank of America ARMs use LIBOR as the basis for ARM interest rate adjustments.

Adjustable Rate Mortgage Arm 7 Things to Know About Adjustable-Rate Mortgages (ARMs) | Money. – Find out how an adjustable-rate mortgage (ARM) works and if it's the right home loan for your situation.

An adjustable rate mortgage loan (ARM) generally begins with an interest rate that is 2-3 percent below a comparable fixed rate mortgage. This could allow you .

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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. And up. And up. Which can really cost you an arm and a leg, pun intended.

And though rates on adjustable-rate mortgages (ARMs) have increased, too, they’re still a far cry from those of longer-term, fixed mortgages. In fact, as of the most recent weekly survey from the.

An adjustable rate mortgage is a loan that bases its interest rate on an index. The index is typically the Libor rate, the fed funds rate, or the one-year Treasury bill. An ARM is also known as an adjustable rate loan, variable rate mortgage, or variable rate loan. Each lender decides how many points it will add to the index rate.

3/1 Adjustable Rate Mortgage. This 30-year loan offers a fixed interest rate for the first 3 years and then turns into a 1 Year Adjustable Rate Mortgage for the remaining 27 years of the loan. This loan has recently become quite popular by those seeking to minimize monthly payments while accepting a.

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.

These are among the best adjustable-rate mortgage lenders in 2019 for a variety of borrowing circumstances, as determined by NerdWallet research.