Common ARM structures: 5/6, 7/6, 10/6. The first number is the fixed-rate period in years. The second is how often the rate adjusts after that, expressed in months (so 5/6 = fixed 5 years, then adjusts every 6 months).
Adjustments are pegged to an index (SOFR in current agency programs) plus a margin. Rate caps limit how much the rate can move at each adjustment and over the life of the loan.
ARMs make sense when you plan to sell or refinance before the first adjustment. In stable or falling rate environments the initial rate can beat a 30-year fixed by 0.5–1%. In volatile markets, the optionality shifts — worth discussing on a specific scenario.