Adjustable Rate Mortgage

While not technically a mortgage product on its own, Adjustable Rate Mortgages are so popular that they are often thought of as one. Any mortgage can be an Adjustable Rate Mortgage simply by having an interest rate that, well, adjusts.

Types of Adjustable Rate Mortgages

There are a number of mortgages that offer adjustable rates, and can therefore be called Adjustable Rate Mortgages. Some mortgages that offer adjustable rates are:

Benefit of an Adjustable Rate Mortgage

Adjustable Rate Mortgages have a few main benefits.

Lower Interest Rate

The initial interest rate on these adjustable products is often lower than their fixed-rate counterparts. The initial rate is often fixed for a period of time before it starts adjusting—typically five, seven, or 10 years. It will then adjust on a fixed schedule outlined when the loan is first obtained—typically every six to 12 months.


Adjustable Rate Mortgages may benefit those who are looking for a lower monthly payment at first, and expect to afford a larger payment as their income increases or their circumstances change. It also offers a lower monthly payment for those planning on selling before the interest rate begins to adjust.