 TITLE: What Is an Adjustable-Rate Mortgage? CONTENT: The initial interest rate charged on an adjustable-rate mortgage will typically be lower than the interest rate on a fixed-rate mortgage, primarily because the lender is taking on less risk. That difference can make an ARM attractive because it reduces your monthly payment immediately.\nBut because the interest rate charged on an adjustable-rate loan can rise over time, it can ultimately cost more money in the long run if you're not careful.\nIf you're trying to decide between a fixed- or adjustable-rate mortgage, the right option for you depends on your situation and appetite for financial risk.\nFor example, if you'd prefer to lock in your monthly payment for the life of the loan and can afford the higher payment amount, a fixed-rate mortgage may be the better choice. That's especially the case when interest rates are relatively low, and you have the chance to nail down an initial low rate.\nOn the other hand, an adjustable-rate mortgage can make more sense when mortgage interest rates are relatively high. By taking advantage of a lower interest rate now, you can score a lower monthly payment and hope interest rates drop by the time your initial period ends. That said, you're taking the risk that interest rates may not decrease, which could result in a higher monthly payment after the initial period ends. END