These loans generally begin with an interest rate that is 2-3 percent below a comparable fixed rate mortgage, and could allow you to buy a more expensive home.

However, interest rates change at specified intervals (possibly each year or less), depending on changing money market conditions.  If interest rates go up, the monthly mortgage payment will also go up.  If rates go down, the mortgage payment will follow.

There are also programs that combine aspects of fixed and adjustable rate mortgages. Some start at a low fixed rate and remain fixed for seven to ten years. After that set period,  payments become subject to adjustments to market conditions. Ask your mortgage professional about these and other special kinds of mortgages that fit your specific financial situation.