ARM stands for ‘adjustable-rate mortgage’, which is a type of home loan that has a fixed interest rate for an initial period of time, then after a certain point the rate changes, which means it is no longer a fixed interest rate, but rather the interest fluctuates during the life of the loan, based on the change or movement in the index rate or specific benchmark.
[Last updated in February of 2022 by the Wex Definitions Team]