While an ARM could save you money in some situations—such as if you plan to move before the introductory period ends—you may wind up paying more than you would with a fixed-rate mortgage if ...

Once the fixed period is over, though, your rate begins to adjust at regular intervals based on market conditions. When you shop around for ARMs, you'll typically see figures like 5/1 or 7/6. The ...

For example, for the week ending Nov. 1, the average rate on a 30-year fixed-rate mortgage was 7.90%. On 5/1 ARMs, the rate was 6.77% — more than a full percentage point lower.

Your interest rate and payments are fixed for an initial period. The fixed-rate period is the first number in your ARM, which usually lasts five, seven or 10 years. With a 5/1 ARM, your initial ...

Whether a fixed- or adjustable-rate mortgage (ARM) is better for you will depend on your financial situation and risk tolerance. Here's how both work and how to decide between them.