5 year arm Meaning and Definition
5 year arm
Pronunciation
/ˈfayv ˈɑrm/
Part of Speech
Noun
Definition
A type of adjustable-rate mortgage that has a fixed interest rate for a period of five years, after which the interest rate may change based on market conditions.
Examples
- The realtor explained the benefits of a 5 year arm to the first-time homebuyer.
- A 5 year arm can be a good option for borrowers who plan to sell or refinance their home within a few years.
Synonyms
- Mortgage
- Home loan
Antonyms
- Fixed-rate mortgage
- Long-term mortgage
Etymology
The term “5 year arm” originated in the 1980s as a response to rising interest rates and changed market conditions.
Usage Notes
When discussing a 5 year arm, it is important to clarify the interest rate and repayment terms to avoid confusion.
Cultural References
A 5 year arm has been featured in several popular finance books and TV shows, including “The Real Deal” and “Money Matters.”
Idiomatic Expressions or Phrases
“Locking in” a 5 year arm refers to committing to a fixed interest rate for a set period.
Related Words or Phrases
Keywords: mortgage, adjustable-rate mortgage, interest rate, fixed-rate mortgage, home loan.
Collocations
5 year arm and fixed interest rate are commonly used together to describe the mortgage’s terms.
Frequency of Use
The term 5 year arm is relatively common in the context of real estate and finance, especially among professionals and industry experts.
Common Misspellings
Gerbera, 5 yr arm, 5yr arm, 5 yrs arm