Adjustable Rate Mortgage (ARM)

A mortgage loan with an interest rate that is linked to a particular economic index. The rate and monthly payments will adjust periodically.

• Traditionally has a lower initial rate.
• Interest rate adjustments are capped to limit the amount that your payment can increase each year and for the life of the loan.
• Option to convert to a fixed-rate mortgage in the future.

Use for: Financing or refinancing a home you plan to live in for less than two or three years (or if you anticipate a significant increase in income over the next three years).