What is Adjustable Rate Mortgage?

An adjustable rate mortgage, or an ARM, is just what it sounds like. It is a mortgage with an interest rate that adjusts on a set schedule. The appeal to an ARM is the lower rate that the loan starts with, but once the mortgage begins to adjust your payment can go up by double or triple amounts. Adjustable rate mortgages were very popular before the housing bubble burst and are blamed for many of the current mortgage problems.