3 ms·

People with adjustable or variable rate mortgages are probably full of regret right now.

xxxtentachyon 4y ago
I’ve got ten years until mine starts adjusting, fingers crossed!
Cerium 4y ago
After watching what happened in 2008, I swore never to get an adjustable rate mortgage. Now I'm quite happy with my 2.99% 30 year.
dehrmann 4y ago
You would have been an idiot not to at least refinance the ARM (if not get into a fixed) a year ago when rates were low. Check back in 5 years when those ARMs start resetting.
onlyrealcuzzo 4y ago
Well 90% of Us mortgages are fixed. Of the ARM mortgages, nearly 90% of them have longer terms than 1 year. You're looking at maybe 2% of mortgages that will be impacted unless rates stay this high for >2 years. Everywhere else in the world beside Denmark, where there are ONLY ARM mortgages - they're gonna be in for a world of hurt if interest rates stay this high for >2 years...
- greensoap 4y ago
  I mean you would really have to go back to 2015 or 2017 and look at how many people were taking 5 or 7 year arms.
atlantas 4y ago
RIP Canada. Over 50% of mortgages since 2021 are variable rate! https://www.reuters.com/article/canada-banks-mortgage-rates-idCAKBN2H428L https://www.reuters.com/article/canada-banks-mortgage-rates-...
- bdlowery 4y ago
  Every mortgage rate in Canada is reevaluated every 5 years. It sucks
Sohcahtoa82 4y ago
Someone explain to me why someone would ever get an ARM unless you were planning on selling the house before it adjusted, because it just seems like an invitation to get fucked.
- mrep 4y ago
  I got a 10 year ARM back in march as it was 1.125% lower than a 30 year fixed. If I cannot get a good refinance in the first 7 years, I'll just focus on paying it off fully in the next 3. Worse comes to worse, I'm like 95% certain it will be worth at least what I paid for it in 10 years if I did need to sell it for any reason so I'm not worried at all.
  - lamontcg 4y ago
    Your income/net worth is high enough to be like "I'll just pay it off in 3 years, no biggie". Not terribly typical.
    - mrep 4y ago
      That and 7 years of savings between now and then but they asked why you would get one and that is one reason why.
- ryathal 4y ago
  When rates were low it really didn't make sense, unless you planned to be paid off before adjustments. If you have poor or average credit an ARM can get you a lower rate and the mortgage will boost your score to refinance to a fixed rate you couldn't get before. ARMs have max adjustments as well, so if you anticipate rates increasing more than that, you can get a lower rate than available at the time and in the future. Bridge loans are less popular now, so you could get an ARM or interest only ARM on a new house and refinance later after selling your old house.

I’ve got ten years until mine starts adjusting, fingers crossed!

After watching what happened in 2008, I swore never to get an adjustable rate mortgage. Now I'm quite happy with my 2.99% 30 year.

dehrmann 4y ago

You would have been an idiot not to at least refinance the ARM (if not get into a fixed) a year ago when rates were low. Check back in 5 years when those ARMs start resetting.

onlyrealcuzzo 4y ago

Well 90% of Us mortgages are fixed. Of the ARM mortgages, nearly 90% of them have longer terms than 1 year. You're looking at maybe 2% of mortgages that will be impacted unless rates stay this high for >2 years. Everywhere else in the world beside Denmark, where there are ONLY ARM mortgages - they're gonna be in for a world of hurt if interest rates stay this high for >2 years...

greensoap 4y ago
I mean you would really have to go back to 2015 or 2017 and look at how many people were taking 5 or 7 year arms.

atlantas 4y ago

RIP Canada. Over 50% of mortgages since 2021 are variable rate! https://www.reuters.com/article/canada-banks-mortgage-rates-idCAKBN2H428L https://www.reuters.com/article/canada-banks-mortgage-rates-...

bdlowery 4y ago
Every mortgage rate in Canada is reevaluated every 5 years. It sucks

Sohcahtoa82 4y ago

Someone explain to me why someone would ever get an ARM unless you were planning on selling the house before it adjusted, because it just seems like an invitation to get fucked.

mrep 4y ago
I got a 10 year ARM back in march as it was 1.125% lower than a 30 year fixed. If I cannot get a good refinance in the first 7 years, I'll just focus on paying it off fully in the next 3. Worse comes to worse, I'm like 95% certain it will be worth at least what I paid for it in 10 years if I did need to sell it for any reason so I'm not worried at all.
- lamontcg 4y ago
  Your income/net worth is high enough to be like "I'll just pay it off in 3 years, no biggie". Not terribly typical.
  - mrep 4y ago
    That and 7 years of savings between now and then but they asked why you would get one and that is one reason why.
ryathal 4y ago
When rates were low it really didn't make sense, unless you planned to be paid off before adjustments. If you have poor or average credit an ARM can get you a lower rate and the mortgage will boost your score to refinance to a fixed rate you couldn't get before. ARMs have max adjustments as well, so if you anticipate rates increasing more than that, you can get a lower rate than available at the time and in the future. Bridge loans are less popular now, so you could get an ARM or interest only ARM on a new house and refinance later after selling your old house.