Tens of thousands of homeowners who used adjustable-rate mortgages during a period of historically low rates now face sharply higher payments.
ARMs offered low introductory rates that made homeownership affordable for many buyers in recent years.
Those teaser periods are ending. When they do, the rate resets to current market levels, which are far higher.
A homeowner who locked in a rate near 3% could see that rate double or more after the adjustment.
The result is a sudden jump in monthly payments that can strain household budgets.
Lenders set the new rate based on an index plus a margin, so the exact increase varies by loan.
Some borrowers may struggle to absorb the higher cost, especially those who stretched to buy at the top of their budget.
Borrowers with these loans should review their reset schedule and contact their servicer about options before the change takes effect.
