When shopping for a mortgage, people often assume that they will get a lower rate by having an adjustable rate mortgage. They believe that the risk associated with the mortgage is shared between the borrower and the lender and therefore the rate would be lower than a traditional fixed rate mortgage.

On the chart we see that this just hasn't been the case. Since September, there have been three separate instances where a 5 year adjustable rate mortgage was higher than a 30 year fixed mortgage.

If you are interested in a specific mortgage plan, understand that mortgage rates have been changing quickly. One mortgage product, such as an adjustable rate mortgage, may look cheaper when rates come out in the morning, but later in the day it could be more expensive than a 30 year fixed mortgage.

It's always better to have your mortgage consultant review all the puzzle pieces for your loan program to make sure that you are getting the best price and product available. The alternative is to pay more in the long term to your mortgage lender and nobody wants to give away money.

Image source: Bankrate.com