http://bucks.blogs.nytimes.com/2011/06/21/borrowers-wade-back-into-adjustable-rate-mortgages/ The rate on a 5/1 adjustable-rate mortgage — that is, a loan where the interest rate is fixed for the first five years and adjusts annually thereafter — is 3.23 percent on average, or about 1.35 percentage points less than a traditional 30-year fixed-rate mortgage, according to HSH.com, which publishes... [more]
http://bucks.blogs.nytimes.com/2011/06/21/borrowers-wade-back-into-adjustable-rate-mortgages/
The rate on a 5/1 adjustable-rate mortgage — that is, a loan where the interest rate is fixed for the first five years and adjusts annually thereafter — is 3.23 percent on average, or about 1.35 percentage points less than a traditional 30-year fixed-rate mortgage, according to HSH.com, which publishes mortgage and consumer loan information.
Lured in by the attractive rates, about 12 percent of the $325 billion in new mortgages made were adjustable-rate loans, known as ARMs, in the first quarter. That compares with 9 percent of new mortgages issued in the fourth quarter of last year, according to Inside Mortgage Finance, a newsletter that tracks the mortgage industry.
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Response by Riversider
over 14 years ago
Posts: 13572
Member since: Apr 2009
This is a great bet to make if you can prepay. Plus many ARMS come with periodic caps that limit the rate shock, but if you don't have that flexibility why would you walk from locking in at the lowest fixed rates in decades.
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This is a great bet to make if you can prepay. Plus many ARMS come with periodic caps that limit the rate shock, but if you don't have that flexibility why would you walk from locking in at the lowest fixed rates in decades.