What feature do Adjustable Rate Mortgages (ARMs) typically NOT have?

Adjustable Rate Mortgages (ARMs) are designed to have interest rates that fluctuate based on a specific index, which reflects prevailing market conditions. Typically, they do include a payment adjustment period, rate caps, and vary interest rates based on an inflation index.

A feature that ARMs do not possess is a fixed interest rate. A fixed rate means that the interest rate on the mortgage stays constant throughout the life of the loan, which is fundamentally opposite to how ARMs operate. Therefore, the nature of ARMs is to have an interest rate that can change, making a fixed interest rate an atypical characteristic for these types of loans.

This dynamic allows borrowers to often start with a lower interest rate than they would find with a fixed-rate mortgage, but it also carries the risk of increasing payments as the rates adjust. Hence, fixed interest rates are not a feature of ARMs.