An Adjustable-Rate Mortgage (ARM) is a form of mortgage loan that is tied to the changing market trends. Its interest rate is tied to the U.S. Treasury Bills or some other economic indices. When the interest rates for these indices go up, the interest rate that you pay with the ARM also increases.

In comparison, there is type of loan, called fixed-rate mortgages , that is the opposite of ARM

One downside of an adjustable-rate mortgage is that it does not offer the stability or assurance of a known mortgage payment in the years to come. If you do not expect to be in your home for many years, however, an adjustable-rate mortgage may be more appropriate for your needs.

You may select how often the interest rate changes in an adjustable-rate mortgage. You may choose among a six-month ARM, a one-year ARM, a two-year ARM, a three-year ARM or some other term.

Home Mortgage Loans - An article on the different options in a home mortgage.

• Mortgage applications rose 8.2% last week: MBA - Lower rates draw in homeowner applicants, data show - CHICAGO (MarketWatch) -- Applications filed for mortgages rebounded last week, rising a seasonally adjusted 8.2% as refinancing-minded borrowers sought to take advantage of more attractive interest rates charged on home loans, according to the Mortgage Bankers Association's latest survey.
• Time to buy? Mortgage rates drop below 5% - Reuters - Thursday, November 5th 2009, 11:46 AM - U.S. mortgage rates fell below 5 percent for the first time in three weeks, a key level that may boost home loan demand and help the hard-hit housing market recover, a closely watched mortgage survey showed Thursday. Interest rates on U.S. 30-year fixed-rate mortgages averaged 4.98 percent for the week ending November 5, down from the previous week's 5.03 percent, according to a survey released on Thursday by home funding company Freddie Mac (FRE.P) (FRE.N).
• Mortgage rates fall below 5% - ASSOCIATED PRESS - Posted: 11/05/2009 01:06:24 PM PST - Updated: 11/05/2009 05:05:38 PM PST - WASHINGTON — Rates for 30-year home loans dipped below 5 percent this week after rising for three straight weeks. The average rate fell to 4.98 percent from 5.03 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates had hovered below 5 percent for nearly a month until inching upward two weeks ago. They hit a record low of 4.78 percent in the spring, but are still attractive for people looking to buy a home or refinance.