When comparing the payments on an adjustable rate mortgage with a fixed rate mortgage on the mortgage comparison calculators you will find that the adjustable rate mortgage generally has a lower payment than the fixed rate loan.  Since the borrower has absorbed some of the lenders interest rates risks by taking the adjustable rate mortgage, this allows the lender to pass on a reasonably lower interest rate to the borrower.  With these home loans, the borrower takes on the risk of rate changes and the lender in turn provides the reward of a lower rate.  Use the adjustable rate mortgage calculator prudently to ascertain the full level of risk being absorbed.

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