What’s the difference between a fixed and an adjustable mortgage loan rate?

A fixed-rate mortgage means that the interest rate will stay the same from the day you take out the loan until the day you pay it off. An adjustable-rate mortgage (ARM), on the other hand, allows the interest rate to fluctuate. Over the course of the loan, it can go up or down as the market changes.

Before you decide to take out an ARM, make sure you know when your payments are subject to increase, how high the interest rate could go, whether or not there’s a cap on interest rate increases, and if you’d still be able to afford your monthly payments under these circumstances.