No. Adustable Rate Mortgages are just that--adjustable. HOWEVER...

There is a maximum rate that your ARM can rise or fall. This is called the life cap of the mortgage. Most ARMs have 3 caps built into them. They are
1) The initial adjustment cap
2) The intermediate adjustment cap
3) The life cap

Intial Cap: The initial cap is the maximum the rate can adjust up or DOWN (many people forget that ARMs can actually go down) at the 1st adjustment period. For example: If you have a 5 year ARM that has a 2% inital cap and your rate is 5.5%, when the loan adjusts at the beginning of the 6th year, the highest the rate could adjust upwards would be 7.5% and the lowest it could fall would be 3.5%.

Intermediate Cap If the loan does not adjust to the maximum or minimum at the time of the initial adjustment, then the intermediate cap kicks in. That is the cap that the rate can adjust at any one time AFTER the inital rate adjustment. Let's take our previous example and assume that the interest rate did not change at the initial adjustment. If the intermediate cap was 2, then the most the rate could adjust upward would be 7.5% and the lowest would be 3.5%. Intermediate adjustment periods can be as short as 1 month and as long as 1 year.

Life cap The life cap is the highest the loan can EVER go up or down. Assuming the life cap is once again 2%, then in our example, the highest rate you would ever have is 7.5% and the lowest is 3.5%.

At the time you are getting your mortgage, you can always tell a great mortgage professional because they will tell you what your maximum mortgage payment will be and ask you if you will be able to comfortably afford it. If you can comfortably afford the payment, then taking advantage of the lower start rate to build up your liquid reserves, pay down non-tax deductible debt, or save more for your retirement can be a great strategy. If you will not be able to afford the payment comfortably, then I recommend you go for the fixed rate loan. That will ensure that if we have a market like we have right now where home prices decline and credit tightens up, you will not be in danger of losing your home if you cannot refinance. I can't tell you how many people I have spoken to over the last year who were never told what their maximum loan payment could be.

Take away: Now that you know about caps, make sure you ask your mortgage professional for the initial, intermediate, and life cap and the corresponding payments when considering an ARM.