Adjustable-rate mortgages (ARMs) are now making their presence felt like never before, with ARMs making up 42.7% by dollar volume of total mortgage applications - an all-time high.

Peter DiMartino, managing director at RBS Greenwich Capital Markets, said that a notable shift has occurred in the way the U.S homeowner views mortgage financing. Historically, borrowers moved into ARMs when interest rates were temporarily high, and then refinanced into a long-term fixed-rate mortgage (usually into a 30-year fixed) when rates fell.

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