What aspect of an adjustable-rate mortgage can change periodically?

In an adjustable-rate mortgage (ARM), the feature that can change periodically is the interest rate. This type of mortgage has an interest rate that periodically adjusts based on a specific benchmark or index, along with a set margin. The adjustments typically happen at regular intervals, such as annually or every few years, depending on the terms of the mortgage.

When the interest rate changes, it directly affects the monthly payment that the borrower has to make, as the payment is calculated based on the current interest rate applied to the remaining loan balance. Therefore, while the monthly payment could indeed fluctuate as the interest rate adjusts, the core aspect that is designed to change at specified intervals is the interest rate itself.

Other aspects such as the loan term and the principal loan amount are typically fixed at the inception of the loan and do not change over time in the same way the interest rate does in an adjustable-rate mortgage.