Again, it depends on the scenario. If you're pretty damn sure you'll sell in 5 years, then a 5 year ARM (fixed for 5 then variable) is a more sensible way to go. It's all in risk tolerance. Most non-Option ARMS done in 2003 and 2004 have life caps that keep the absolute highest rate at 9% or so, with a start rate of 3% fixed 5 years - perfectly attainable in 2003.