Thousands of Homeowners Face Adjustable-Rate Mortgage Resets and Higher Payments
About 150,000 U.S. homeowners with adjustable-rate mortgages (ARMs) are facing their first interest rate adjustment this year, according to ICE Mortgage Technology data provided to CNBC. Of these, approximately 64,000 will see adjustments between August and December. With recent increases in interest rates since many borrowers took out their loans, some may experience monthly payment jumps of hundreds or even over $1,000. ARMs make up just 5.6% of the roughly 55.4 million active U.S. mortgages but are currently at a five-year high with about 3.1 million outstanding ARMs. Most remain in their initial fixed-rate period, while others have entered the adjustable phase. The impact on individual borrowers depends on introductory rates and caps that limit how much interest can rise or fall. The average rate for a 5/1 ARM is currently around 6.65%, lower than the current 30-year fixed mortgage rate of about 7.48%. However, as ARMs adjust upward in response to higher market rates, many borrowers may face financial strain.
Topics: Adjustable-Rate Mortgages (ARMs) Homeowners Impact Interest Rate Adjustments