Definitions for "Adjustable Rate Mortgages"
ARMs. Interest rates are adjusted periodically at predetermined intervals in accordance with changes that occur in an agreed index. Can have a rate cap from one period to the next and a rate cap through to maturity. Also known as a floating or variable rate mortgage.
(ARM) A mortgage having an interest rate that varies depending on the change in some outside standard such as prime rate, interest rate on United States Treasury securities, or the Inflation rate. The lender can increase or decrease the interest rate on the mortgage at specified intervals based on changing market conditions. The mortgage agreement specifies when the interest rate may change and any limits imposed.
(ARM)- Mortgage that is set with an interest rate that can vary. This is typically done in preset time periods throughout the mortgage.