TIL fixed rate cash out beats ARM for peace of mind

I compared a 30 year fixed cash out refi against a 5/1 ARM from two different lenders last month. The fixed rate was 6.8% while the ARM started at 5.9% but could jump to 8.5% after year five. I ran the numbers on my $180k loan in Austin and realized the ARM would cost me way more if rates go up. So I stuck with the fixed rate even though the monthly payment is $120 higher. Has anyone else seen a big difference between those two options?

2 comments

2 Comments

cameron42611d ago

Kept me up at night worrying so I went with the fixed rate too.

riley_price11d ago

Did you end up locking in a decent rate @cameron426? I did the same thing last year, and honestly not checking the news every morning is worth the peace of mind. Just set the auto pay and forget about it.