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.

Your lifetime cap is 2%? Or adjustment cap? Most ARMs have both.

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Again, it's about timing. Your rate at adjustment is based on an index plus a margin. Right now most indices are at all time highs due to inflation, so if you adjusted today, you'd be screwed. Whereas a loan that adjusts every six months (again with a cap) would peak, but then start coming down as inflation and the corresponding index start coming down.

That just means it adjust every six months, so the adjustments could go up or down. If your 5/5 adjusted today it would skyrocket, then be stuck there for 5 years instead of going up and down with the market.

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Neither is better or worse at face value, but they will behave differently and each has positives and negatives