A 5 year adjustable rate mortgage (ARM) is a 30 year mortgage whose rate is fixed for the first 5 years, then adjusts every 5 years. A 5/1 adjustable rate mortgage (ARM) is a 30 year mortgage whose rate is fixed for the first five years, then the rate adjusts each year.

5 Year ARM loans are available in regular principal & interest, or conventional repayment, Interest Only, and now 5 Year Fixed Rate Pay Option ARM mortgages, which offer principal & interest, interest only, and low 1% minimum payment options all in one fixed rate (for 5 years) hybrid ARM loan.

A five year adjustable rate mortgage may be ideal for first-time buyers purchasing a starter home. Those who relocate frequently for work also can enjoy the benefits of a five year adjustable rate mortgage.

The 5 year adjustable rate mortgage can be ideal for the borrower who wants to stay in their home for a short time. This can save you more money as the total cost of the loan will be less than a long term fixed rate.

The Five year Arm (also known as the 5/1 Arm) is available in an interest only option. Great program for those who are only planning on holding their property for a short period of time.

The next step down from a 5 year ARM would be a 3 year ARM. Although the rate is slightly lower on a 3 year ARM you will lose 2 years of a fixed rate period. The 5 year ARM is considered by many mortgage brokers to be the most logical and safest ARM to have.