Adjustable Rate Mortgages (ARM)s are loans whose interest rate can vary during the loan's term. These loans usually have a fixed interest rate for an initial period of time and then can adjust based on current market conditions.

 

The initial rate on an ARM is lower than on a fixed rate mortgage which allows you to afford and hence purchase a more expensive home. Adjustable rate mortgages are usually amortized over a period of 30 years with the initial rate being fixed for anywhere from 1 month to 10 years. All ARM loans have a "margin" plus an "index." Margins on loans range from 1.75% to 3.5% depending on the index and the amount financed in relation to the property value.

 

The index is the financial instrument that the ARM loan is tied to such as: 1-Year Treasury Security, LIBOR (London Interbank Offered Rate), Prime, 6-Month Certificate of Deposit (CD) and the 11th District Cost of Funds (COFI).

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When the time comes for the ARM to adjust, the margin will be added to the index and typically rounded to the nearest 1/8 of one percent to arrive at the new interest rate. That rate will then be fixed for the next adjustment period. This adjustment can occur every year, but there are factors limiting how much the rates can adjust. These factors are called "caps". Suppose you had a "3/1 ARM" with an initial cap of 2%, a lifetime cap of 6%, and initial interest rate of 6.25%. The highest rate you could have in the fourth year would be 8.25%, and the highest rate you could have during the life of the loan would be 12.25%.

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Some ARM loans have a conversion feature that would allow you to convert the loan from an adjustable rate to a fixed rate. There is a minimal charge to convert;

 

however, the conversion rate is usually slightly higher than the market rate that the lender could provide you at that time by refinancing.

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可調利率抵押貸款 (ARM) 是利率在貸款期限內可能變化的貸款。這些貸款的初始利率通常是固定的，然後可以根據當前的市場狀況進行調整。

 

ARM 的初始利率低於固定利率抵押貸款，這使您能夠負擔得起並因此購買更昂貴的房屋。可調利率抵押貸款通常在 30 年內攤銷，初始利率固定為 1 個月到 10 年。所有 ARM 貸款都有“保證金”加“指數”。貸款利潤率從 1.75% 到 3.5% 不等，具體取決於指數和與物業價值相關的融資金額。

 

該指數是與 ARM 貸款相關的金融工具，例如：1 年期國債、LIBOR（倫敦銀行同業拆借利率）、Prime、6 個月存款證 (CD) 和第 11 區資金成本 (COFI) ）。

 

當 ARM 需要調整時，保證金將被添加到指數中，通常會四捨五入到最接近的 1% 的 1/8 以得出新的利率。該費率將在下一個調整期固定。這種調整每年都可能發生，但有一些因素限制了利率的調整幅度。這些因素被稱為“上限”。假設您有一個“3/1 ARM”，初始上限為 2%，終生上限為 6%，初始利率為 6.25%。第四年的最高利率為 8.25%，貸款期限內的最高利率為 12.25%。 一些 ARM 貸款具有轉換功能，可讓您將貸款從可調利率轉換為固定利率。

 

轉換費用最低；但是，轉換率通常略高於貸方當時可以通過再融資為您提供的市場利率。

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