What your posted is true, but what you’re describing isn’t a “refinancing” in the context of my post. A 5-year ARM is a five-year loan, even if the amortization is for 30 years. At the end of the five years the rate is reset for the next term.
A true “refinancing” is when the customer pays off the loan and replaces it with a new one before the term of the loan (30-year fixed rate, 5-year ARM, etc.) expires.
True, but your point was that the bank can't raise the rates and an ARM allows them to raise the rates without the customer initiating a refinance. The bank can lower the rates, too.
-PJ