If it's right for you, an adjustable-rate mortgage (ARM) can be a great choice. That might sound obvious, but there are a lot of misconceptions out there about ARMs, causing some people to shy away from them. With an adjustable-rate mortgage, the rate stays the same for the first few years, usually five or seven. After that initial period, your mortgage converts to a variable rate that may go up according to changes in the underlying financial index.
Your Avadian mortgage will adjust on the anniversary date every year. It can adjust only one time per year and can only adjust by a certain percentage. The details are spelled out in your mortgage agreement, so you'll know what to expect as your rate changes.

The Pros
- The initial interest rate is usually lower than on a comparable fixed-rate mortgage
- Lower monthly payment for the fixed period of the mortgage
The Cons
- After the fixed-rate period ends, the rate could also adjust up, so monthly payments would increase
- Interest rates are unpredictable, so you can't predict what your payments will be in the future
Is an ARM right for me?
An ARM is great for homeowners looking to stay in their home for a short period of time. If your fixed-rate period is less than the time you plan to live in the house, your interest rate will never change. So if you move around a lot, you are a first-time homeowner who expects to upgrade in the near future, or you are in the business of flipping houses and are planning to sell the house as soon as renovations are complete, you might benefit from an ARM.