Homeowners who signed up for low adjustable-rate mortgages several years ago are now confronting an expensive catch in the loan terms. With interest rates still near their highest point in years, some borrowers are seeing rates move from below 3% to around 8%, which can raise monthly payments by hundreds or even thousands of dollars. In one Minneapolis case, a borrower's payment is projected to rise from $6,800 to $9,300 in January.
The Wall Street Journal reports that the impact could be widespread. About 186,000 ARMs are scheduled to reset next year, and the typical first payment jump is expected to be about $645, according to Intercontinental Exchange. ARMs still make up only about 5% of outstanding mortgages, and modern versions include more protections than the loans that contributed to the 2008 financial crisis. Even so, the reset will be painful for many borrowers. The Journal says the biggest group is made up of people who took out seven-year fixed-period adjustable-rate mortgages in 2020, and they are facing a median monthly payment increase of 43%, or $1,269.
More from Digilifetrends
Zillow cautions buyers about home prices and shifting mortgage rates
Here's what may come next for Seagate and Micron shares. Read moreBofA sees 80% upside for Seagate stock, but Micron shares look cheaper
1 min read · Updated 2026-10-29Zillow cautions buyers about rising housing expenses and mortgage-rate shifts
With mortgage rates still elevated, Zillow is warning prospective buyers that the true cost of owning a home goes well beyond the monthly loan payment.
3 min read · Updated 2026-10-29US home sales outlook for 2026 weakens to 2% growth or less as mortgage rates remain above 7%
The outlook for the 2026 housing market has dimmed for prospective buyers as mortgage rates remain above 7%. That shift has led National Association of Realtors chief economist…
3 min read · Updated 2026-10-28