hybrid ARM

Definition

Mortgage type that is a cross between two popular home loan types; it has features of both the fixed rate mortgage and the adjustable rate mortgage. In this situation, the mortgage interest remains unchanged for a certain number of years, and thereafter it starts to rise in step with the market interest rate up to a limit (rate cap) set in the mortgage agreement. Often the interest rate in a hybrid ARM is substantially lower than in the other types because the interest rate risk is shared between the lender and the borrower.
It is considered more suitable for those who plan to sell their house between five to seven years.

Use hybrid ARM in a sentence

It was a hybrid arm and that meant a few things and I had to look it up to check it out.

​ Was this Helpful? YES  NO 6 people found this helpful.

You may want to try and take on a hybrid arm mortage that will allow you more flexibility in the deal.

​ Was this Helpful? YES  NO 9 people found this helpful.

You should see the great rate I got when I refinanced my home with a hybrid ARM, and the best thing is no huge balloon payments!

​ Was this Helpful? YES  NO 4 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
hybrid annuity hybrid debt