Adjustment Interval

Filed Under »
Dictionary Says

Definition of 'Adjustment Interval'

The amount of time between interest rate changes to an adjustable rate mortgage (ARM). Most ARMs have two adjustment intervals. The first interval is typically longer (usually 3,5,7 or 10 years) during which there is a fixed rate of interest and payment. This initial interval is followed by periodic adjustments to the interest rate (usually every 6 months or year) throughout the remainder of the loan.
Investopedia Says

Investopedia explains 'Adjustment Interval'

An example of this would be a 3/1 ARM. The first number denotes the initial period of time in which the interest rate and payment remain fixed followed by the second number denoting the subsequent adjustment intervals. In this example, the interest rate and payment remains the same for the first three years of the loan, after which it can adjust every year.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Nontraditional Mortgages

    A broad term ...
  2. Adjustable-Rate Mortgage - ARM

    A type of ...
  3. Payment Option ARM Minimum Payment

    An option to ...
  4. Flexible Payment ARM

    A type of ...
  5. 2/28 Adjustable-Rate Mortgage - 2/28 ARM

    A type of ...
  6. Hybrid ARM

    A hybrid ...
  7. Balloon Payment

    An oversized ...
  8. Interest Rate

    The amount ...
  9. Seasonal Adjustment

    A statistical ...
  10. Delinquent

    The failure to ...

Articles Of Interest

  1. Option ARMs: American Dream Or Mortgage Nightmare?

    Option adjustable rate mortgages could make or break your home-buying experience.
  2. Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  3. Mortgages: How Much Can You Afford?

    Answering this means number-crunching as well as factoring in other considerations and expenses.
  4. Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  5. Mortgages: Fixed-Rate Versus Adjustable-Rate

    Both of these have advantages and disadvantages depending on your financial needs and prospects.
  6. ARMed And Dangerous

    In a climate of rising interest rates, having an adjustable-rate mortgage can be risky.
  7. Mortgage Basics

    Learn how to navigate what may be your biggest and most important loan.
  8. Make A Risk-Based Mortgage Decision

    Find out how to choose which mortgage style is right for you.
  9. Financing Basics For First-Time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
  10. Common Liabilities That Hurt Your Net Worth

    Every penny that you keep out of the liability side of the net worth equation essentially ends up on the asset side.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center