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9.1.14 Flashcard Review

Amanda Ukasick

Created on September 13, 2025

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An adjustable-rate mortgage (ARM) is a home loan with an interest rate that can change over time, usually in relation to a __________.

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financial index

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The __________ is the benchmark interest rate that reflects market trends and fluctuates over time.

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index

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With ARMs, there is the concern of the rate substantially increasing after the initial period. To combat this, __________ are implemented which limit how much the rate can increase at one time or over the life of the loan.

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The correct answer is...

rate caps

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