Mortgage Glossary
Adjustable-Rate Mortgage (ARM)
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
An adjustable-rate mortgage (ARM) is a home loan whose interest rate is fixed for an initial period, then adjusts periodically based on a market index plus a margin.
What Adjustable-Rate Mortgage (ARM) means
Common structures are 5/6, 7/6, and 10/6 ARMs, where the first number is the fixed years and the rate adjusts every six months after. Caps limit how much the rate can rise per adjustment and over the life of the loan.
Florida example
A Florida buyer planning to sell within seven years might take a 7/6 ARM at 6.0% instead of a 6.75% fixed loan, saving on payments during the fixed period. The risk is payment uncertainty if they stay past year seven.
Related program: Learn more →
Related Mortgage Terms
Still have questions?
Talk to a licensed Florida mortgage broker — no cost, no obligation.