Adjustable-rate mortgages (ARMs) impact home affordability by initially offering lower interest rates compared to fixed loans, which can reduce monthly payments at the start. Currently, ARMs account for about fifteen percent of mortgages due to wider spread between fixed and adjustable rates. However, borrowers must consider potential rate increases since ARMs adjust after a fixed period, sometimes causing payment spikes. Buyers should choose ARMs with clear caps and model payment increases by at least zero point five percent to ensure affordability over time, balancing initial savings versus long-term risk.