After the 7-year fixed period, the loan will adjust to market rates. Most ARMs come with rate caps, which limit the amount the rate can rise at each adjustment. For instance, a loan at a 6.5% start rate might have 2/2/5 caps. In this case, the maximum increase would be 8.5% at the first adjustment, 10.5% at the second adjustment, and 11.5% at any time during the loan. This doesn’t mean the loan is guaranteed to rise this much; these are just the limits. It’s even possible that the rate could go down.