What is the difference between an adjustable rate mortgage and a fixed rate mortgage?
user
I think I know the answer!
assistant
Great, what is the answer?
user
An adjustable rate mortgage (ARM) lets you pay a lower rate of interest for a period of time, and then later you can adjust the interest rate to a higher rate.
assistant
What is a fixed rate mortgage?
user
A fixed rate mortgage (FRM) gives you a fixed rate of interest for the life of the loan.  For example, it might give you a 2.8% interest rate for the entire life of the loan.
assistant
Why would I choose and adjustable rate mortgage over a fixed rate mortgage?
user
Usually it’s because you expect the interest rate to be lower for a period of time, and then you expect to be able to adjust it to a higher rate later.  For example, you might have a high income for a while, and so you can afford to pay a lower interest rate, and then later, when your income is lower, you might be able to adjust the interest rate to a higher rate.
assistant
What is the difference between an adjustable rate mortgage and a fixed rate mortgage?
user
I think I know the answer!
assistant
Great, what is the answer?
user
An adjustable rate mortgage (ARM) lets you pay a lower rate of interest for a period of time, and then later you can adjust the interest rate to a higher rate.
assistant
What is a fixed rate mortgage?
user
A fixed rate mortgage (FRM) gives you a fixed rate of interest for the life of the loan.  For example, it might give you a 2.8% interest rate for the entire life of the loan.
assistant
Why would I choose and adjustable rate mortgage over a fixed rate mortgage?
user
With an ARM, you can choose the rate of interest, or you can “lock” into a certain rate for a certain amount of time.  With a fixed rate mortgage, you choose the rate of interest, but it is locked in for the life of the loan.
assistant
What is the difference between an adjustable rate mortgage and a fixed rate mortgage?