Mortgage Borrowers Play a Bettor's Game

In Cincinnati, where the average house costs around $160,000 -- $10,000 less than the national average -- real estate agent Terry Hankner says most buyers are taking what the fixed-rate market offers.

"We're still at 6.25% for the 30-year fixed, and that's still pretty attractive, because housing prices are still affordable," she says. "This little pickup of interest rates hasn't put anybody in the adjustable-versus-fixed mode yet."

A sense of security influences the choice, says Ruth Kennedy, a broker in Fort Myers, Fla., where the average housing cost is about $170,000, in line with the national average.

"There's nothing wrong with adjustables, but most people here get real nervous about them," she says. "The people who do adjustables are people who are more secure, and they'll kind of take the gamble. They can do something about it if it gets out of control later."

Jason Potts, a broker at Tomasso Mortgage in nearby Cape Coral, says initial interest in ARMs often turns to welcome relief at getting relatively low fixed rates.

"I don't have a crystal ball and neither do they," he says. "People call and right off the bat request an ARM, and when I look at their assets, I'll discuss fixed-rate mortgages, because they will know that rate and the payment will not change."