A fixed-rate mortgage keeps the same interest rate for the life of the loan, while an ARM has a lower initial rate that adjusts periodically based on the market. Fixed-rate mortgages keep the same interest rate for the entire loan term. Adjustable-rate mortgages (ARMs) start with a lower rate that adjusts periodically based on market conditions. ARMs can save you money if you plan to sell or refinance before the rate adjusts, but they’re riskier if you plan to stay long-term.