An adjustable-rate mortgage (ARM), also known as a variable-rate mortgage, is a type of home loan where the interest rate is not fixed but can change over time based on market conditions.

The interest rate on an ARM is typically tied to a specific financial index, and it can fluctuate up or down depending on changes in that index. This means that the monthly payments for an ARM can increase or decrease over the life of the loan, making it a more dynamic and potentially riskier option compared to a fixed-rate mortgage, which has a consistent interest rate throughout the loan term