Interest rate is pegged to a rate over which the lender has no control.
Starting rate may be lower than on conventional rate because borrower shares risk of rising rates with lender. Fixed, but sometimes can be extended in lieu of increase in monthly payment when interest rate rises. May change when interest rate changes or only a specified intervals, such as annually or every 30 to 5 years. These mortgages may take many forms. To protect yourself, shop around for favorable terms, including limits on the increase in rate permitted in any one year and over the whole term, and limits on payment increases and negative amortization.