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Adjustable-Rate Mortgage (ARM) is a mortgage in which the interest rate and monthly payments may change periodically over the life of the loan, based on changes in an index.

Typically, adjustable rate mortgages have a rate cap, limiting how much the rate can increase on every adjustment period and over the life of the mortgage.

ARMs are contrasted with FRMs (fixed rate mortgages), where interest rates cannot change during the life of the mortgage.

CHARM Booklet

Adjustable Rate Mortgage, Adjustable Rate Mortgages, ARMs
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