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What is the difference between a Fixed Rate Mortgage (FRM) and an Adjustable Rate Mortgage(ARM)?

April 26, 2017adjustable rate mortgage arm fixed rate mortgage FRM

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What is the difference between a Fixed Rate Mortgage (FRM) and an Adjustable Rate Mortgage(ARM)?

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The fixed rate mortgage has an interest rate that is fixed for the life of the loan and a monthly principal and interest payment which remains the same month after month after month, except for adjustments in property taxes and other escrow items. Adjustable Rate or Variable Rate Mortgages offer the opportunity to take advantage of a changing market. The interest rate on an ARM Loan varies periodically as interest rate conditions change. Because the interest rate fluctuates, the initial rate on an ARM is lower than a fixed rate mortgage.