The type of mortgage loans for the sponsorship of personal possession of property with a variable interest rate is called Adjustable Rate Mortgage. ARM is not to be mixed up with the GPM (Graduated Payment Mortgage), in which variable payment amount is offered but with a fixed interest rate. Adjustable Rate Mortgage Real estate, and FRM are the two key types of mortgage loans. In FRM, the interest rate does not change with the change of market index over the mortgage life. In ARM, the interest rate on the loan is so often attuned according to the market index. Some of the most commonly used interest rate indices are constant-maturity Treasury (CMT) securities, London Interbank Offered Rate (LIBOR) and the Cost of Fund Index (COFI) but there are lenders who prefer their own cost of funds as indices.