FT MarketWatch

Adjustable Rate Mortgage

ARM. A Mortgage with an Interest rate that may change, usually in response to changes in the Treasury Bill rate or the Prime rate. The purpose of the Interest rate Adjustment is primarily to bring the Interest rate on the mortgage In line with Market rate. The Mortgage holder is protected by a maximum Interest rate (called a ceiling), which might be reset annually. ARMs usually start with better rates than Fixed rate mortgages, in Order to compensate the borrower for the additional Risk that future Interest rate fluctuations will create.

Related Terms: 19 Adjustment, Bill, Borrow, Call, Fixed rate, In line, Interest, Interest rate, Market rate, Mortgage, Market, Order, Owe, Prime, Prime rate, Risk, Ring, Treasury Bill, Treasury
Other Related Pages: Category: Real_Estate Starting With: A
Semi Related Terms: 704 CLICK HERE TO VIEW
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