When I was a slightly younger man learning to be a lender at a bank, interest rates were on the way down (2001). By the time I was actually giving advice to people about serious loan decisions, rates appeared to be about as low as they would go. At the time, the home mortgage market was incentivizing Adjustable Rate Mortgage (ARM) loans by offering an even lower rate if you didn't mind taking a gamble that in 5 years, your rate might adjust up a couple of percentage points. Since statistically, young adults are extremely likely to relocate every 3 to 5 years, I advised people to take the lower rate ARM option instead of locking in the 30 year fixed rates.
Today, I received a letter from our mortgage company. Somehow, we've managed to stay put for a full five years. Our ARM is now adjusting. Oops. The first couple of lines look like bad news. BUT WAIT...rates are miraculously better now than they were five years ago. Our rate is dropping from 5.125 to 3.25! Celebration! I'm so happy I took my own advice and didn't lock in the 30 year fixed rate.
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