As Fixed Rates Rise, Should You Consider an Adjustable-Rate Mortgage? | Mortgages and Advice
In response to rising mortgage rates, many of today's homebuyers have been turning to adjustable-rate mortgages, or ARMs. The share of mortgages with an adjustable rate jumped from around 3% at the beginning of 2022 to nearly 13% last October – levels that hadn't been seen since 2008, according to the Mortgage Bankers Association. Although the ARM share has pulled back to around 7% in 2023, it remains well above the previous couple of years when mortgage rates – and the demand for ARMs – were historically low. (Getty Images)Adjustable-rate mortgages typically come with lower initial interest rates and monthly payments than traditional fixed-rate mortgages, but the repayment terms can change over time. Since your mortgage rate may rise, there's an inherent risk that your monthly payments a...