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Many Americans took advantage of historically low mortgage rates during the pandemic. But for homeowners who opted for adjustable-rate mortgages, those savings might not last. As mortgage rates continue to remain elevated, hundreds of thousands of borrowers are soon nearing the end of their introductory fixed-rate periods, putting them at risk of higher monthly payments. And with refinancing no longer offering the same relief it once did, some homeowners could find themselves facing a difficult financial decision.
Producer: Juhohn Lee
Reporter: Mike Winters
Additional Reporting by: Sarah Agostino
Edited by: Macklin Fishman, Dennis Donovan
Animation: Emily Park, Jason Reginato
Senior Director of Video: Jessica Leibowitz
Additional Footage: Getty Images
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How Cheap Mortgages Are Backfiring On Homeowners
Who TF took out an ARM when a 30 year fixed was 3%?!?!?
Why would you do an ARM during record low rates?
you're telling me it is now costing those homeowner's an ARM and a leg?
I'm so glad I did my refi back in 2021 with a new rate of 2.875 fixed!
Yep 30 year at 2.8% love it. Staying right here.
I got. 2.25 % interest rate on a 30 year fixed on a refi of 230000 in souther California. I will never sell , never refinance and never rent it out .
My wife and I started with a 7 year ARM at 3.75% in 2016, refinanced to a 30 year fixed at 2.99% in 2020.
US is the only country which offers 30-year fixed mortgage. it blows my mind that even then some people chose to go with variable to a save on a few basis points, when they could have locked in 2 ish % for a lifetime.
Anyone in the US that bought a house in 2020-2022 without locking in an extremely low interest rate for 15-30 years was either not planning on being in that house very long or was too financially illiterate to buy a house. The near-zero interest rates we saw in the 2001, 2008, and 2020 chaos were historically unusual. A 7% fixed-rate mortgage is normal. Don't buy more house than you can afford.
I remember when a loan officer scoffed at me being adamant about going with a fixed rate instead of an ARM. Glad I didn’t listen to her.
Never do an adjustable rate loan. Stability in cash flow but high instability in your biggest monthly payment is a nightmare divorces, default and bankruptcies are made of.
0:01 you said everything I needed to hear the moment you mentioned the word "adjustable". people really didn't learn the lessons from 2008. 😢
It's not a rate problem but a total cost of ownership problem. If you've bought too much home and only way you can afford the mortgage is by ARM with low interest rate, you're already in red
Refi'd a fixed in 2022 at 3%. Got very lucky.
This remind me of when Salle Mae did this to college students back in the early 2000's.
Who would do something so crazy
If you need an adjustable rate to get a loan on a home, then you are not financially ready to own a home.
This could get crazy people marking down homes just to sell may be trapped in them.
I learned about ARMs in 2008, watching NBC Nightly News featuring people who couldn’t afford their houses when the interest rates went back up
June 2020 30 year mortgage was 3.1! That rate is gold.