With 30-year fixed mortgage rates above 7%, more borrowers are considering adjustable-rate mortgages to lower their initial payments. ARMs accounted for 11.4% of mortgage applications in the Mortgage Bankers Association’s November 4 report, up from 10.5% three weeks earlier and the highest share since September 2025. MBA latest report (https://www.mba.org/news-and-research/newsroom/news/2026/11/04/mortgage-applications-decrease-in-latest-mba-weekly-survey); October 14 report (https://www.mba.org/news-and-research/newsroom/news/2026/10/14/mortgage-applications-decrease-in-latest-mba-weekly-survey).
That lower starting payment can be tempting. But what happens when the rate adjusts—and what if you cannot refinance?
A lower introductory rate could mean a smaller monthly payment and some breathing room when buying a home in the Catskills, Hudson Valley or Upstate New York.
An adjustable-rate mortgage deserves consideration. It also deserves careful scrutiny. Don’t let an attractive starting payment trap you in a loan you cannot comfortably afford later.
Know what stays fixed
With a fixed-rate mortgage, your interest rate stays the same. With a standard, fully amortizing fixed-rate loan, your scheduled principal-and-interest payment remains steady. Your total monthly housing payment can still change as property taxes, insurance and other charges change.
An adjustable-rate mortgage, or ARM, usually starts with a rate that stays fixed for an introductory period. Afterward, the rate adjusts under the loan’s terms. That starting payment should never be mistaken for a permanent commitment from the lender. CFPB mortgage comparison (https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-fixed-rate-and-adjustable-rate-mortgage-arm-loan-en-100/).
Inflation can change the picture quickly
Inflation has remained a concern for years, even when individual monthly reports appear relatively quiet. Slower inflation does not mean prices have returned to their old levels.
It would be inaccurate to say inflation has not moved. The annual CPI inflation rate went from 1.4% in December 2020 to 7.0% in December 2021. The latest available September 2026 report showed prices rising 3.7% over the preceding year. That history illustrates how quickly conditions can change. BLS historical figures (https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm); September 2026 report (https://www.bls.gov/news.release/archives/cpi_10142026.htm).
For a homebuyer, the practical concern is having room in the budget if household expenses rise at the same time the mortgage adjusts.
Read the adjustment terms
An ARM’s future rate generally depends on a market index plus a margin specified in the loan agreement, subject to applicable limits. Your introductory rate alone does not tell you what you might pay later. CFPB explanation of indexes and margins (https://www.consumerfinance.gov/ask-cfpb/for-an-adjustable-rate-mortgage-arm-what-are-the-index-and-margin-and-how-do-they-work-en-1949/).
Ask the lender to explain, in writing:
• When the first adjustment occurs.
• How frequently later adjustments occur.
• The first-adjustment, subsequent-adjustment and lifetime caps.
• Any minimum rate, or floor.
• The highest payment permitted under the loan’s terms.
A cap limits a rate change; it does not guarantee an affordable payment. Two loans with the same starting rate can carry substantially different adjustment risks. CFPB guidance on rate caps (https://www.consumerfinance.gov/ask-cfpb/what-are-rate-caps-with-an-adjustable-rate-mortgage-arm-and-how-do-they-work-en-1951/).
“I’ll refinance” is not a guarantee
You may intend to refinance or sell before the rate changes. But your income, credit, property value or personal circumstances could change first. The CFPB specifically cautions buyers against assuming that refinancing or selling will be available before an adjustment. CFPB guidance (https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-fixed-rate-and-adjustable-rate-mortgage-arm-loan-en-100/).
An ARM can suit some buyers. The danger is choosing one because the introductory payment is the only payment you can manage.
Whether you are buying in the Catskills, Hudson Valley or Upstate New York, leave room for the unexpected. Before committing to a mortgage, understand the payment you could face—not just the payment advertised today.
Contact the Law Office of Steven Kurlander at 845-796-8948 to discuss your purchase and review the transaction’s legal terms.
