It's a 5 year term on a 25 year mortgage. Basically you refinance the remainder of the mortgage every 5 years under new terms (and possibly a different financia

It's a 5 year term on a 25 year mortgage. Basically you refinance the remainder of the mortgage every 5 years under new terms (and possibly a different financial institution). If you choose a fixed rate for the five year term, your interest rate will change when you refinance based on the market rates at that time. Edit: Also if you choose a variable rate mortgage, your monthly payment doesn't automatically change (unless the payment is insufficient to service interest) as the rate changes, instead you end up paying off less of the principal which makes refinancing even more painful.