Good Afternoon,

With the lowering of the FF Rate in the United States and the lower of the Prime lending rate in other countries, fixed adjustable (ARM's) are extremely competitive right now, especially in the Jumbo market.  I would suggest the ARM's to any Jumbo mortgage client because the savings far outweigh the fixed rate product.  Here is why:

Jumbo 5/1 with/without Interest Only-            4.625%

Jumbo 7/1 with/without Interest Only-            5.375%

Jumbo 30yr without Interest Only-                 6.125%

Example:

$1million purchase price with 20% down

30yr Fixed rate 6.125%-  $4,860/mo

5/1 Fixed Adjustable rate 4.625%-  $4113/mo   or chose the interest only payment of $3,083/mo

Here is the big picture- The interest savings over the 5 years (which is the fixed term of the 5/1) between the 30yr and 5/1 is $44,820!  By selecting the Interest Only payment on the 5/1, the Interest savings stays the same, while the payment savings is $106,620.

While the fiscal volatility remains a concern in the mortgage arena, the massive disconnect between the fixed and adjustable products must be monitored for the client's best interest.  

Thank you so much and please let us know if there is anything we can do for you,