The average homeowner moves every five to 10 years. But the average amount of time a homeowner will keep a mortgage is less, perhaps three to five years, according to the Mortgage Bankers Association of America. If you're only going to keep your mortgage, or stay in your home, for five years or less, there's almost no reason in the world to get a 30-year fixed rate mortgage. You will save hundreds, if not thousands, of dollars with an adjustable rate loan. The only reason to get a fixed-rate mortgage if you planning to stay just a few years, is the fear factor.
Many homeowners are risk-averse.
With an ARM, they worry constantly about their interest rate. They worry it will go up, and spend time calculating how much more money their mortgage will cost them. They don't believe lenders who tell them that the rate can also go down. They imagine only that it will rise. The truth is, the fear factor has kept people from saving a whole lot of money on their loans.