A borrower obtains a 5/1 ARM. Which of the following best describes their loan?

A borrower obtains a 5/1 ARM. Which of the following best describes their loan?

The loan is for 30 years and adjusts annually during the first 5 years. After that, the rate remains fixed.

The loan is for 30 years and the initial interest rate is 5% followed by 1% increases every 5 years.

The loan adjusts annually but cant go above a 5% interest rate.

The loan is for 30 years and adjusts annually after an initial 5-year period where the interest rate is fixed.

The loan is for 5 years and adjusts annually.