Which component remains unchanged during the term of an adjustable-rate mortgage?

In an adjustable-rate mortgage (ARM), the lender's margin is a fixed component of the loan agreement that remains unchanged throughout the term of the mortgage. When the interest rate is adjusted, the margin is added to a benchmark index rate to determine the new interest rate. This margin represents the lender's profit and risk premium and does not fluctuate over time, providing stability in that aspect of the loan.

The interest rate itself, while initially fixed, is subject to adjustment based on the agreement's terms, which typically tie it to an index. The payment amount can vary as well, depending on changes in the interest rate, affecting the overall monthly payments. The loan term, the period over which the loan must be repaid, is typically also fixed and would not change; however, the question specifically asks for the component that remains unchanged in the context of adjustments that an ARM can experience.

Thus, recognizing that the lender's margin remains constant highlights its role in the structure of adjustable-rate mortgages and distinguishes it from other elements that may fluctuate.