The adjustment period is the duration in which the rates of interest on any ARM (adjustable-rate mortgage) can be reset as per specific principles.
It is the scheduled duration between every such date of adjustment. The periods of adjustment are fixed at intervals of multi-annual, annual, semi-annual, or even month-on-month. It also indicates the time period from any effective date, till (and inclusive) the time of expiry.
The adjustment period means the adjustments in rates of interest throughout any adjustable rate mortgage, or ARMS Most such periods are usually one or three years, although it may extend up to five years as well. These mechanisms are prevalent in the home loan segment, making the term intrinsically connected to the real estate industry.
