4 ms·

Aren't "locked-in" rates typically renegotiated every 5 years or so? So if rates keep increasing the entire time some folks might be in for a rude awakening in

• marssaxman 8y ago
  That's an adjustable-rate mortgage. A traditional US 30-year mortgage has a fixed rate for the entire term. You can refinance, if you want to, but you're just getting a new 30-year (or 15-year) loan which pays off the old one, and then you have a new fixed rate for that entire term.
  • jgh 8y ago
    I see. I'm not a homeowner so haven't gone through that before.
  • sizzle 8y ago
    If my rate is locked in at say 3.5%, would refinancing ever work out in my favor at interest rates >3.5%?
    • marssaxman 8y ago
      It depends on your situation. I did it last year, and I ended up with roughly $700 more space in my monthly budget even though my mortgage interest rate went up by 0.25%. I have enough equity now that I no longer have to pay for mortgage insurance, which saves a lot, and I also took the opportunity to roll up all my other debt into the mortgage. I'll pay more for the house over the long run, but I have more flexibility in the meantime, and that's been completely worth it.