Yes. You can pay off an adjustable-rate mortgage, or ARM, early. However, depending on the terms of your loan, you may be charged a pre-payment penalty. Many borrowers choose to pay an extra amount toward their mortgage each month, with the goal of paying it off early. However, unlike with fixed-rate mortgages, extra payments won't shorten the term of your ARM loan. It could lower your monthly payments, though. This is because your payments are recalculated each time the interest rate adjusts. For example, if you have a 5/1 ARM with a 30-year term, your interest rate will adjust for the first time after 5 years. At that point, your monthly payments will be recalculated over the next 25 years based on the amount you still owe. When the interest rate is adjusted again the next year, your payments will be recalculated over the next 24 years, and so on. This is an important difference between fixed- and adjustable-rate mortgages, and you can talk to a mortgage banker to learn more.