Are adjustable-rate mortgages (ARMs) considered variable rate loans?

Adjustable-rate mortgages (ARMs) are indeed considered variable rate loans because their interest rates can change at specified times based on market conditions, typically linked to an index. This variability allows the interest rate on an ARM to fluctuate over the life of the loan, which can affect monthly payments.

In contrast, fixed-rate mortgages maintain a constant interest rate throughout the term of the loan, meaning the payments do not change regardless of market conditions. The other options refer to conditions that do not apply universally to ARMs, as the defining characteristic of an ARM is its variable interest rate, irrespective of loan amounts or specific conditions. Thus, acknowledging ARMs as variable rate loans accurately reflects their nature in the lending landscape.