Loan programs
Adjustable-rate mortgages (ARMs)
An adjustable-rate mortgage starts with an interest rate that stays put for an initial period — commonly 5, 7 or 10 years. After that, the rate can go up or down at set intervals based on a market index. That initial rate is often lower than a comparable fixed-rate loan's, which is why ARMs appeal to buyers with a clear timeline.
Reviewed by Clint Aguon, CEO & Loan Officer · NMLS #1893008 · Updated September 2026
How an ARM works
- Initial period: your rate doesn't change for the first 5, 7 or 10 years, depending on the loan.
- Adjustments: after that, the rate resets on a schedule — many ARMs today adjust every six months — by adding a set margin to an index.
- Caps: limits on how much the rate can rise at the first adjustment, at each one after, and over the life of the loan. Your loan estimate shows all three.
Who an ARM can work for
- You expect to sell or refinance before the initial period ends.
- You're buying a starter home, or relocating for a job with a set term.
- You expect your income to grow and can handle a higher payment if rates rise.
The trade-off
If you're still in the loan when it adjusts, your payment could rise — sometimes substantially. Before choosing an ARM, we'll show you the worst-case payment under the caps so there are no surprises.