# What is the difference between a 5'1 and 30 year ARM?

**30**-

**year fixed**-rate

**mortgage**is the U.S. industry-standard

**mortgage**product, and has been for some time. And it's pretty easy to understand why: The interest rate stays the same for the entire term of the loan. On the other hand,

**with a 5/1 ARM**, your initial interest rate will be

**fixed**for a period of five years.

Subsequently, one may also ask, is a 5'1 arm a good idea?

A **5/1 ARM** can work out in your favor under the right conditions. Here's when a **5/1 ARM** might be a **good idea**. The advantage of a **5/1 ARM** is that during the first phase, you get a much lower interest rate and payment. If you plan to sell in less than six or seven years, a **5/1 ARM** could be a smart choice.

Subsequently, question is, what is a 30 year ARM? Put simply, the 5/**1 ARM** is an adjustable-rate mortgage with a **30**-**year** loan term that's fixed for the first five years and adjustable for the remaining 25 years. So during years one through five, the interest rate never changes.

Moreover, what is a 5'1 arm 30 year term rate?

Basically, an **ARM** is a mortgage loan that has an **interest rate** that adjusts, or changes, usually once a **year**. Instead, the **interest rate** on a 5 **year ARM** is fixed for the first five **years of** the loan. After five years, the **interest rate** can change annually for the next 25 years until the loan is paid off.

What is a 5'1 Adjustable Rate Mortgage?

A **5/1 adjustable rate mortgage** (**5/1 ARM**) is an **adjustable**-**rate mortgage** (**ARM**) with an interest **rate** that is initially fixed for five years then adjusts each year. The “5” refers to the number of initial years with a fixed **rate**, and the “1” refers to how often the **rate** adjusts after the initial period.