ARM

A mortgage that features predetermined adjustments of the loan interest rate at regular intervals based on an established index. The interest rate is adjusted at each interval to a rate equivalent to the index value plus a predetermined spread, or margin, over the index, usually subject to per-interval and to life-of-loan interest rate and/or payment rate caps.

ADJUSTABLE RATE MORTGAGE
A mortgage where the interest rate is not fixed, but changes during the life of the loan in line with movements in an index rate.