Adjustable-rate mortgage (ARM) options [typically have lower initial interest rates than fixed-rate mortgages. The interest rate and monthly principal & interest (P&I) payments remain the same for an initial period of time (such as 5, 7, or 10 years), then adjusts to reflect market conditions up to a yearly and max rate cap limit – meaning your rate can rise (or fall) over time. This option may provide flexibility if you plan to move, pay off your loan or refinance before the initial rate adjusts.