Alabama Real Estate Exam Prep 2026 | Real Estate Practice Questions

How long is the initial fixed-rate period in a 5/1 ARM mortgage?

1 year 5 years 10 years None

Correct Answer:

5 years

Explanation:

A 5/1 ARM mortgage refers to an adjustable rate mortgage with a fixed interest rate for the first 5 years. This means that after the initial fixed-rate period of 5 years, the interest rate can change based on market conditions. Option A, 1 year, is incorrect because it does not match with the 5/1 term of the mortgage. Option C, 10 years, is too long for the initial fixed-rate period of a 5/1 ARM. Option D, None, is incorrect because it suggests that there is no initial fixed-rate period, which is not the case for a 5/1 ARM mortgage.

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