Arm mortgage Meaning and Definition
Arm Mortgage
Pronunciation
(Not applicable)
Part of Speech
Noun
Definition
An adjustable-rate mortgage in which the interest rate is initially set lower than a traditional mortgage, but periodically adjusts to market conditions, often resulting in changes to the borrower’s monthly payments.
Examples
- I signed up for an arm mortgage expecting the low interest rates to save me money.
- After a few years, the arm mortgage adjusted to a higher interest rate, increasing my monthly payments.
Synonyms
- Variable-rate mortgage
- Adjustable-rate loan
Antonyms
- Fixed-rate mortgage
- Stable interest rate
Etymology
The term “arm mortgage” is derived from the financial industry, where the term “ARM” refers to the adjustable interest rate.
Usage Notes
When discussing arm mortgages, it’s essential to understand the fluctuating interest rates and how they may affect the borrower’s monthly payments.
Cultural References
Arm mortgages have been featured in popular TV shows and movies, such as “The Simpsons” and “The Wolf of Wall Street,” highlighting their complex and often misunderstood nature.
Idiomatic Expressions or Phrases
“Getting an arm mortgage” has become a common phrase to describe taking a risk by signing up for an adjustable-rate mortgage.
Related Words or Phrases
Variable-rate loan, adjustable-rate mortgage, interest rate
Collocations
Arm mortgage can often be found collocated with words like “home,” “loan,” “interest,” and “rate.”
Frequency of Use
The term “arm mortgage” has become increasingly common in modern-day financial conversations, but it’s still not as widely used as fixed-rate mortgages.
Common Misspellings
arm morrigage, arm mortgge, arm mortage