An ARM home loan has an interest rate that may vary over the term of the loan. ARM stands for “Adjustable Rate Mortgage.” Homeowners with ARMs are protected by a ceiling, or maximum interest rate. ARMs typically begin with more attractive rates than fixed rate mortgages. The most popular arm home loans are 5 year arms, 3 yr arms, 7 year arms, and 10yr arms. An ARM often works well for people who would like to enjoy the low initial rate and who may be refinancing or moving within 5-7 years. Also, ARM loans are utilized normally when fixed rates are high or for jumbo loans.