[quote=Rich Toscano][quote=briansd1]Actually, it depends on the holding period.

When I hear people say “we want move up in 5 years” I wonder why they would take on more costly loans.

I believe there’s is more psychology/animal spirits in people decisions that rationale.[/quote]

Because there is a difference in wanting to move in 5 years and being forced to… or, put another way, getting the fixed rate opens up the option to keep the property longer than originally intended.[/quote]
Some people don’t want that option though? So the additional cost to have that option is not worth it. I agree that there’s a difference in wanting vs forcing to move, but you’re not being forced to move if you get an ARM. You just have to pay extra for that want if you change your mind (assuming rates goes up from here). Everyone’s situation is different and there are a lot of calculation to determine where’s the break even point between ARM vs fixed in term of how long you want to stay.