Is it a Good Time to Select a Fixed Rate Mortgage or an Adjustable Rate Mortgage?

In today's marketplace, and for the past eight months, ever since the Federal Reserve chose to keep interest rates artifically low by subsidizing the industry, the easy answer is that you should get a fixed rate mortgage.

With rates in the high 4's and low 5's, there is no reason to not lock yourself in at this historically low interest rate.

Only under rare and unique circumstances, like a borrower was certain that they would only be in their home for another 5 years, would a borrower be justified to choose the lower interest rate of a 5 year adjustable mortgage. Primarily because the rate would be fixed for the first 5 years, and they would be out of their loan before the rate adjusted. However, even if a borrower plans on being out in 5 years, what if the home does not sell right away? They would be stuck with an adjustable rate, which could make the mortgage payment much higher than during the fixed rate period.

In today's marketplace - the conventional wisdom is think 30 YEAR FIXED.