>>>>>Laying blames is exclusively your business so don't peddle it around. FYI, great majority of US homeowners take fixed-rate mortgages.
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>>>>In Norway more or less nobody has fixed interest mortgages, because statistics over many, many years have shown that it's cheaper in the long run with "variable" interest. I am pretty sure the same is valid in the rest of Europe.
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>>>You could be right, but press, at least here, always blames (sorry, for the word :) exotic (i.e. adjustable etc.) mortgages for homeowner failures i.e. foreclosures. It is also traditional in States, as far as I know, to take fixed-rate. I am unsure about statistics, but, in general, imo, adjustable is still a gamble that rates will go down.
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>>No, a gamble that rates will not go up too sharply. Obviously that gamble has not paid off in the last year or year and a half but for quite a while before that adjustable rate mortgages really were cheaper, especially for those like Alan who took the money they were saying each month and applied it to the principal. Also, most Americans refinanced every few years anyway. Very few people actually paid off a 30 year mortgage over 30 years.
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>Refinancing is not free, i.e. if someone got bad mortgage conditions initially then he/she would have to pay to get better conditions. Obviously, it it the most general assumption, and personal situations could be very unique, especially with government-sponsored bailouts underway.

Over the past 10 years or so refinancing has become almost free. I have done it with no closing costs at all. When rates drop, lenders are competing for homeowners who want to refinance.