Originally published December 2010. Updated March 2026.
Adjustable-rate mortgages — ARMs — tend to get a bad reputation, largely because of their association with the mortgage crisis of the mid-2000s. But lumping all ARMs together misses an important distinction: the problem back then wasn’t adjustable rate mortgages themselves, it was option ARMs and loose lending standards. A well-structured ARM, used in the right situation, can still be a smart financial tool.
How ARMs Work
