An adjustable-rate mortgage (aka ARM) is typically a 30-year home loan with an interest rate that changes often during the term length. You may notice two numbers before some of the common ARM loan types. The first number stands for how long the fixed rate will last for. The second number indicates how often your rate can change per year once the fixed rate period has passed. If you take out a 3/1 ARM , you’ll be paying a fixed rate for a total of three years and an adjusted rate for a total of 27 years. With an adjustable rate, you take the risk of paying an increased interest rate some years and the benefit of paying a lower interest rate during other years. There is no guarantee as to how high or low the interest rate will be from year to year.