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dwright1542 t1_iye15qo wrote

Reply to comment by ItFappens in Mortgage decision - 5% 7/6 ARM vs 5.375% 30-yr fixed? by Bojackson63044

2% per adjustment, 4% lifetime. So if it adjusted now, it would be 2% over what we have now, which still isn't bad. Point is, 2% change over 5 years gives you time to prepare. What if it adjusts every 6 months up? No thanks. Too risky even for me, and I've never had a fixed mortgage.

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ItFappens t1_iye8f25 wrote

That makes sense. Most 7/6 ARMs have a 5/1/5 or 2/1/5 adjustment cap. The first number being the max adjustment in the first interval after the fixed period, the second being the max adjustment adjustment at each interval thereafter, the last number being the lifetime cap.

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Your risk threshold is a very personal variable, so I'm not saying you're wrong, but just pointing out these two options aren't that much different. I have a 7/6 ARM with 5/2/5 adjustment terms and it doesn't worry me any more than one with yours would.

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