Re: Interest Rates gamble - 30 yr. fixed vs. 5-year ARM\'s
My 5.25% 30-year looks pretty good now. The Fed will raise rates at least 3 more times times before next summer, so your ARM is gonna go up. If there is a remote chance you will be in that house in 5 years, go with the fixed rate. Rates will not stay low forever and they are not going down anytime soon.
This really boils down to your risk tolerance. Will you be kicking yourself if your arm goes up to 7.5% and you re-fi to a 7.25% 30 year when you could have had a much lower rate a year earlier?
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