There are many types of ARMs available. The most common are 3/1, 5/1, 7/1 and 10/1 ARMs. The first number represents the period during which your interest rate will be fixed. The second number represents how often your interest rate can change after the fixed period expires. So, in a 30-year 5/1 ARM for example, your interest rate would be the same for the first five years of your loan. After those five years, your interest rate can increase or decrease each year for the remaining 25 years of the mortgage.
With most ARMs, there are set caps to protect against these periodic increases. A periodic cap simply limits how much your rate can adjust at specified adjustment dates. A lifetime cap limits how much your rate can increase over the life of your loan. A payment cap limits how much your monthly payment can increase with each adjustment.