A place where I write on home mortgage
Your interest rate and mortgage payments are higher when national interest rates are higher, and drop when national interest rates fall. Because this kind of mortgage is less risky for banks, they set the interest rates for adjustable rate mortgages slightly lower than they do for fixed rate mortgages. They also offer an introductory period, usually three to seven years, during which the interest rate on your home mortgage is locked at an attractively low rate. Which one is best for you? Avoid immediately being swayed by the lower rates offered by adjustable rate loans. How long do you plan to stay in your house? Are rates likely to go any lower during your stay? If interest rates are at a record high when you buy your house, taking out an adjustable rate mortgage is a sensible idea, since your rate is likely to improve.