cleveland.com
An adjustable-rate mortgage (ARM) is a kind of variable home loan that sees home loan payments fluctuate increasing or down based on modifications to the loan provider's prime rate. The primary portion of the mortgage remains the same throughout the term, preserving your amortization schedule.

If the prime rate modifications, the interest part of the home loan will immediately change, adjusting greater or lower based on whether rates have increased or reduced. This means you could right away face higher home loan payments if interest rates increase and lower payments if rates decrease.

ARM vs VRM: Key Differences

ARM and VRMs share some similarities: when rates of interest change, so will the mortgage payment's interest portion. However, the crucial differences depend on how the payments are structured.

With both VRMs and ARMs, the interest rate will change when the prime rate modifications