Mortgage rates are surging because of the Iran war. Here's what to do.
Mortgage rates are surging due to the Iran war, causing a boost in adjustable-rate mortgages. Borrowers are considering ARMs as a strategic option to lower their monthly payments, with potential savings of around $185 per month for the median-priced home.
Mortgage rates have surged due to the Iran war. The 30-year fixed-rate mortgage rate rose to 6.38% in late March, prompting borrowers to consider adjustable-rate mortgages (ARMs). ARMs offer a lower rate for an introductory period, typically 5-7 years, before adjusting to a floating rate. This option can provide significant savings, with a recent analysis showing ARMs accounted for over 31% of mortgage originations in California. However, ARMs also come with risks, such as the potential for rates to adjust upward. Another option is a mortgage rate buydown, which allows borrowers to pay a set amount upfront for a lower rate in the initial years of the loan.
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