Rise in adjustable-rate mortgage share not a concern

Rising interest rates have led to an increase in the share of mortgages originated with an adjustable rate (ARMs). But the market share is still small, and the products have not been targeted at riskier borrowers. Moreover, with nearly all ARMs having an initial fixed-rate period of five years and interest rates likely to be cut in 2020, the chance of borrowers facing a payment shock when their rate resets is low.