Fixed-Period ARM

The mortgage was made. After 100k down and a borrowing of 300k, the 600-square-foot cottage in Palo Alto, CA is all yours. It was an Adjustable Rate Mortgage, meaning that the interest rates will adjust based on an index. In this case, let's call it LIBOR. But the period or duration of the bond that has been created in your name is fixed.

That is, it is set for 15 years, during which you will ratably pay off your debt obligation of 300k until you full own the shoebox you live in. The duration is set, or fixed, at 15 years. That period of time ain't changing.