But at the end of that period, the adjustable-rate mortgage payment will vary once more. Determining whether or not an adjustable-rate mortgage payment is the right type of loan for you usually depends on your financial situation. Also, it depends on the type of adjustable-rate mortgage payment you plan to make. If interest rates rise to the point that the interest due cannot be covered by your monthly amortization mortgage payment, the unpaid amount will be added into the loan balance, increasing it over time. For instance, the payment cap of your amortization mortgage is 7.5%. With a monthly amortization mortgage payment of $1,000 and rising interest rates, your new payment would normally be $1200/month. Usually, the interest rate of the 30-year balloon payment mortgage is lower than a normal 30-year fixed rate mortgage with due date of 30 years. Monthly payments of balloon payment mortgage are still amortized based on the 30-year term. But at the end of five or seven years, a large amount of the balloon payment mortgage is due. Fixed Rate Home Mortgage Rates Even though home mortgage rates are low, fixed rate home mortgage rates roughly remain the same. This is due to the fact that fixed rate mortgage rates are based on bond rates and not on fed rates. For most people, refinancing a home only makes sense if the new home mortgage rate is 2% lower than your current rate. The overall interest bill of a 30-year fixed rate mortgage is much higher because of the long amortization period. And because payments for 30-day fixed rate mortgages are usually used to pay up the interest rather than the principal at first, borrowers will be building up their equity at a slower pace. The amortization period for this type of fixed rate home mortgage is longer and the monthly payments are lower. One drawback, however of this home mortgage is its high interest bill and slow equity build-up. 15-year fixed rate home mortgages attract borrowers because of its relatively shorter amortization period.