Financing

Adjustable Rate Mortgage (ARM)

Mortgage with an interest rate that adjusts on a schedule after a fixed period.

Reviewed 9 August 2026 by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Lower initial rate, but reset risk after 5–10 years. Common on commercial.

Examples

5/1 ARM: 5 years fixed, then resets annually to SOFR + margin.

Common mistakes

Using ARM on a long-term buy-and-hold without a refi plan.

Adjustable Rate Mortgage (ARM)

Plain-English explanation

Examples

Common mistakes

Related questions