The Illusion of Adjustable-Rate Mortgages

Adjustable-rate mortgages didn’t look dangerous. They looked smart. Lower monthly payments.

Easier approval. A “temporary” low interest rate. For millions of borrowers,

it felt like the only way into a home. But here’s the trap. An adjustable-rate

mortgage starts with a teaser rate — artificially low for the first few years.

During this period, payments feel manageable. Sometimes even cheap. What most borrowers didn’t understand

was what came next. After the teaser period ended, the rate reset. And it didn’t reset

gently. Payments jumped — sometimes doubling overnight. Banks knew this

would happen. They also knew most borrowers qualified only because of the teaser rate