Mortgages - Links

An arm has four basic components. The initial interest rate is typically one to three percentage points less than that of most fixed rate mortgages. The adjustment interval controls the time between when the monthly payment changes in response to changes in the interest rate. The index is the reference for determining the interest rate (often it is based on the one-year treasury bill). The margin is the additional amount the lender charges over the index (typically between one to three percentage points).