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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