– Adjustable Rate Mortgage 3/1 ARM (3 year ARM) – the rate is fixed for a period of 3 years after which in the 4th year the loan becomes an adjustable rate mortgage (ARM). The adjustable rate is tied to the 1-year treasury index and is added to a pre-determined margin (usually between 2.25-3.0%) to arrive at your new monthly rate.
Arm Mortgages Explained Mortgage Interest Rates vs. APRs: What’s the Difference? – To explain the difference between the two. that you really understand which mortgage offers you the best deal. If you’re getting an adjustable-rate mortgage, it’s especially important to look at.