An adjustable-rate mortgage (ARM) has fluctuating interest rates tied to market rates, offering potential lower initial rates. In contrast, fixed-rate mortgages provide stable interest rates throughout the loan term.
Adjustable-rate mortgage (ARM) is a type of loan where the interest rate fluctuates with market interest rates. It is utilized for purchasing homes and offers the potential for lower initial interest rates compared to fixed-rate loans.
In the context of mortgage loans, an adjustable-rate mortgage is associated with varying interest rates, making it suitable for borrowers who can handle potential rate adjustments.
Conversely, fixed-rate mortgages have consistent interest rates throughout the loan term, providing stability but potentially higher initial rates than ARMs.
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