Adjustable-rate mortgage loans (ARMs) have an interest rate that will change or “adjust” from time to time. Typically, the rate on an ARM will change every year after an initial period of remaining fixed. It is therefore referred to as a “hybrid” product.  A hybrid ARM loan is one that starts off with a fixed or unchanging interest rate, before switching over to an adjustable rate.  For instance, the 5/1 ARM loan carries a fixed rate of interest for the first five years, after which it begins to adjust every one year, or annually.  That’s what the 5 and the 1 signify in the name.