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What’s the main difference between fixed rate and ARM mortgages?

April 26, 2017arm fixed main mortgages rate

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What’s the main difference between fixed rate and ARM mortgages?

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A fixed rate mortgage’s interest rate is fixed for the life of the loan. For example, a 15 yr. fixed mortgage with a 5.75% rate will still have the same rate in 15yrs. An Adjustable Rate Mortgage’s (ARM) interest rate is fixed for a period and varies after the initial period. For example a 5yr ARM will have an interest rate fixed for the first 5yrs and then will vary based on the prevailing market rate.