Practical Law Glossary Item 4-502-1788 (Approx. 2 pages)
Glossary
Two-Step Mortgage
A type of adjustable rate mortgage (ARM) that involves a fixed interest rate for a specified period of time (usually five or seven years) followed by an adjustment to the interest rate tied to current market rates. At the adjustment date, borrowers often select either a variable rate or a fixed rate for the rest of the mortgage term.