Definition
An ARM, or adjustable-rate mortgage, is a mortgage with an interest rate that can change after an initial fixed period.
If you are comparing mortgage options, treat arm as one piece of the total cost and risk picture, not a standalone detail.
Why It Matters
ARM loans matter because the starting payment may be lower, but the payment can change later if the rate adjusts.
Simple Example
A 5/1 ARM may hold one rate for five years, then adjust once per year after that.
How to Use This Term
When you see arm on a loan estimate, calculator result, or lender conversation, connect it to three practical questions: how it affects monthly payment, how it affects cash needed now, and how it affects flexibility later.