Adjustable-Rate Mortgage (ARM)

An Adjustable-Rate Mortgage (ARM) is a loan in which the interest rate fluctuates periodically over the loan term. This differs from fixed-rate mortgages, where the interest rate remains constant throughout. ARMs typically have an initial period of fixed interest rates, followed by adjustments based on a financial index and a margin. 

A Loan Management Software can track these adjustments and recalculate monthly payments accordingly.