Actually Benjammin, YMMV.

We closed on a new home three years ago this week, as well as vacant wooded lot that we intended to build a large custom home on just down the street. Despite the fact that interest rates were at near historic lows this time three years ago, I nevertheless chose a three year ARM (fixed for the first three years, then adjustable annually each October) for the simple fact that we originally intended to have our custom home completed (and this home sold) prior to the rate adjustment, so I figured it would be nice to save with the lower monthly payments that the ARM provided.

Situations change, and for the foreseeable future my wife and I plan to stay in the house we're in now, and continue to defer construction on the new home until some later time. I received formal notice from the mortgage holder earlier this month that the interest rate adjustment on our variable rate mortgage has actually dropped from 5.50% to 5.25%

Based upon the best fixed rate mortgage that was available back when we closed this time in 2005, the ARM has saved us close to $10k in interest. With the recent 1/4 point drop, we'll save an additional $4k or so this year alone (over the fixed rate offered three years ago) with the intention of refinancing to a fixed rate mortgage sometime next summer (unless of course rates continue to drop significantly).

Jim