[Destro]

"40% of all new mortgages are adjustable rate mortgages. "

I did not know that. My dad viewed adjustable rate mortgages with disdain - remembering the 70s?

[Old_Mil]

My dad viewed adjustable rate mortgages with disdain - remembering the 70s?

Your dad is a wise man. Honestly, I don't think I'd even consider an ARM with interest rates at 10%,12%, or 14%. You can always refinance a fixed rate mortgage if rates fall enough to make it worth your while to do so. On the other hand, if you're holding an ARM you have no hedge against rising rates.

ARM's are simply ways for banks to protect their profit margins - and for people to buy houses they can't afford and shouldn't be buying in the first place.