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Real Estate vocabulary · Mortgages & Financing

Adjustable-rate mortgage

Meaning in real estate, with examples

nounCommon term

In real estate, adjustable-rate mortgage means: A home loan whose interest rate can go up or down over time in line with a market index, so the monthly payment may change.

In Turkish: değişken faizli konut kredisi

How it is used

American English, shortened to ARM. A 5/1 ARM has a fixed rate for five years and then adjusts once a year. In the UK people say variable-rate or tracker mortgage.

Example sentences

  1. An adjustable-rate mortgage starts cheaper, but the payments can rise later.

  2. They switched from an adjustable-rate mortgage to a fixed one.

Common collocations

  • 5/1 adjustable-rate mortgage
  • rate adjustment
  • variable-rate mortgage
  • tracker mortgage
  • fixed-rate mortgageA home loan whose interest rate stays the same for an agreed period or for the whole loan, so the monthly payment does not change.
  • interest rateThe percentage a lender charges for borrowing money, which decides how much a mortgage costs on top of the amount borrowed.
  • refinanceTo replace an existing mortgage with a new one, usually to get a lower interest rate, change the term or borrow extra money against the property.
  • mortgageA long-term loan used to buy a property, in which the property itself serves as security for the lender until the loan is paid back.

More terms: Mortgages & Financing

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