What best describes adjustable rate mortgage?

An adjustable-rate mortgage (ARM) is a type of home loan where the interest rate is initially fixed for a specific period, after which it adjusts periodically based on market conditions or a specified index. This means monthly payments can fluctuate over time, potentially leading to lower initial payments but increased costs later. ARMs typically start with lower rates compared to fixed-rate mortgages, making them attractive for borrowers who plan to sell or refinance before the rate adjustment occurs. However, they carry the risk of rising payments if interest rates increase significantly.