ARM (Adjustable Rate Mortgage)

Intermediate 🏠 Real Estate

Definition

A mortgage with an interest rate that changes over time, basically a financial time bomb for those who can't do math.

Example Usage

The ARM started at 3% but jumped to 6% after the initial five-year fixed period.

Origin

Mortgage product terminology, popularized during the pre-2008 housing boom

Fun Fact

ARMs were heavily marketed in the 2000s; their role in the financial crisis made them infamous.

Source: Mortgage product terminology

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