In this two-minute video, you’ll learn the difference between an adjustable-rate mortgage (ARM) and a fixed-rate mortgage.

Summary

• Loan terms are 15, 20 and 30 years.
• Fixed-rate mortgages may offer predictability and stability with a rate that doesn’t change.
• A 5/1 ARM has a fixed rate for the first five years.
• The initial rate of an ARM is generally lower than a fixed-rate mortgage, but may change after the initial fixed period.
• ARMs might be a great option if you don’t plan to stay in the home for a long time.