An adjustable rate mortgage (ARM) usually starts with an interest rate that is about 2 to 3 percent below that of most fixed-rate loans. Then the rate adjusts upward at specified intervals. An adjustable mortgage is a good choice if you are strapped for cash because you can qualify to buy at a lower interest rate and have a year or two of lower payments. However, be sure to run the numbers so you understand, and can afford, what your monthly payment eventually will be.