What does it mean when you have an adjustable-rate mortgage on your Jax home. The adjustable-rate mortgage (ARM) means that the interest rate and monthly payment can change over the span of the loan. This is due to an interest rate for an ARM that is tied to an index that may fluctuate over time.  In order to protect against dramatic increases in the rate, ARM loans typically have caps that limit the rate from rising above a certain amount between adjustments on your North Fl home. For example, a loan might be set at no more than 2 percent a year. There may also be a ceiling on the loan on how much the rate can increase during its lifespan. An example might be the loan cannot go above six percent. Adjustable-rate mortgages are becoming widely accepted as an alternative to fixed-rate mortgages because of their protections and low introductory rates for first time homebuyer.