5/1 Jumbo ARM - Definition

A 5/1 jumbo ARM is an adjustable-rate mortgage, or ARM, that has an initial interest rate for the first five years, and which changes annually thereafter, based in an index. A jumbo mortgage is a home loan that exceeds a certain amount ($300,700 in 2002 and $322,700 in 2003). Jumbo mortgages generally have a slightly higher interest rate than smaller (sometimes called "conventional" or "conforming") mortgages.