You Currently Have a 5 Year Adjustable Variable Rate Mortgage

question 130

Multiple Choice

You currently have a 5 year adjustable variable rate mortgage which is 4 years into the adjustment period.The current interest rate is 3.5% per annum,and the rate is indexed to the 10 year Treasury note which is currently yielding 2.15%.Most financial forecasters are anticipating rate increases over the 2016-2017 period,but there is no consensus on the total amount of the increases.Given the interest rate environment,what would be the best course of action for your mortgage?

• A) Double up on payments and pay it off in half of the term.
• B) Refinance at the conventional 30 year fixed rate currently offered at 3.75%.
• C) Stick with your existing mortgage since it is currently 3.5% and below the offered fixed rate.
• D) Refinance into a 1 year ARM so that when rates decrease you will be in a better position.

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