Correspondent Blog
Tag: Adjustable Rate Loans
09/07/22
The Five Problems with Adjustable Rate Loans
A common strategy for community banks, when faced with a borrower that wants a 10-year fixed rate loan, is to offer a five-year fixed rate that adjusts in five years. Historically, this has worked for some customers and banks because, over the last 40 years, five-year rates have generally fallen. As interest rates fall, a…