Fixed-rate just feels safer to me, even if it’s not the “cheapest” on paper. I’ve seen a neighbor get burned by a rate jump—one year he was fine, next year he was sweating bullets. I guess I just prefer knowing what’s coming each month.
RIDING THE RATE ROLLERCOASTER WITH ADJUSTABLE MORTGAGES
I hear you on the fixed-rate comfort. I refinanced last year and went fixed, mostly because my memory of my parents’ “surprise” mortgage bill in the ‘90s still haunts me. They went from planning a vacation to planning how to keep the lights on—no thanks.
But I’ve got a buddy who swears by his ARM. He’s convinced he’s gaming the system, but every time rates start creeping up, he gets this look like he’s waiting for a pop quiz he didn’t study for. I just can’t do that kind of suspense. I like my drama on Netflix, not in my mailbox.
Sure, fixed might cost a bit more upfront, but at least I know what’s coming. No plot twists. Just boring, predictable payments... and honestly, that’s the kind of boring I can live with.
RIDING THE RATE ROLLERCOASTER WITH ADJUSTABLE MORTGAGES
Totally get where you’re coming from. I’ve run the numbers on ARMs a few times, but every time I think about the “what if” scenarios, I just can’t pull the trigger. Here’s how I see it:
- Predictability matters. Life throws enough curveballs—don’t need my mortgage joining in.
- Fixed rates might be a bit higher at first, but you’re buying peace of mind. That’s worth something.
- I’ve watched friends ride out those ARM adjustments and it’s not pretty. One guy ended up scrambling to refinance when his payment jumped way more than he expected.
- Sure, some folks win with ARMs if they time it right or move before the rate resets... but that’s a gamble.
Honestly, boring payments are underrated. There’s nothing wrong with wanting stability, especially when it comes to your biggest monthly bill. You’re not missing out by playing it safe—sometimes “boring” is just smart.
RIDING THE RATE ROLLERCOASTER WITH ADJUSTABLE MORTGAGES
I get the appeal of fixed rates—there’s a certain comfort in knowing your payment won’t suddenly spike. But I keep wondering, are we sometimes overpaying for that peace of mind? I’ve used ARMs on a couple properties, but only when I was pretty sure I’d sell or refi before the adjustment period kicked in. The key thing for me is really digging into the numbers: What’s the cap on rate increases? How much could your payment actually jump, worst case?
One thing I’ve noticed—people often underestimate how much rates can move in five or seven years. If you’re not watching the market or planning ahead, it can bite you. On the flip side, if you’re disciplined and have an exit strategy, ARMs can save a chunk of change up front. But yeah, if you value sleep over squeezing every dollar, fixed is hard to beat. Just depends on your risk tolerance and how long you plan to stick around.
You’re not alone—lots of homeowners with 5/1 ARMs are feeling the same stress as rates rise. ARMs can be great in the early years, but it’s normal to question them when a reset is coming. At Dream Home Mortgage, we always suggest checking your adjustment date, index + margin, and what your new payment could look like. You may still have options like refinancing into a fixed rate before the adjustment. If you ever want a quick review, we’re here to help.
