A recent study by Point, a home equity investment platform, reveals that 70% of homeowners who opted for adjustable-rate mortgages (ARMs) within the last decade regret their decision despite initial savings.

ARM mortgages are popular as they usually offer lower interest rates during the initial phase than fixed-rate mortgages. Homeowners can refinance into a fixed-rate mortgage once the low-rate period ends to avoid the adjustable rate.

However, those who obtained an ARM in the past decade may find that the rates at the end of their fixed period will coincide with a period of historically high interest rates. Consequently, their monthly mortgage payments will be higher compared with those from three, five, seven, or 10 years ago. But 82% of those still in the fixed-rate period plan to continue with their ARM once that period ends, the survey finds. Changed circumstances may affect their ability to obtain a new mortgage, or they may be banking on a decrease in interest rates in the future.

Refinancing might not help homeowners save much in the long run in the current interest rate environment.

“Refinancing to get out of a high-interest, fluctuating mortgage may seem like the best option at first glance, but in reality, it could cost homeowners more in the end, depending on their situation," says Eddie Lim, co-founder and CEO of Point.