Usually the main reason for choosing an adjustable rate over a fixed rate is that the adjustable rate is lower to start with.  That will give you a lower monthly payment so it's more attractive. If you're looking at an interest rate chart you might see something like 1 year ARM, or 3/1 Fixed / Adjustable 30 year mortgage.  An ARM rate is always fixed for a certain amount of time, and when I say fixed I'm talking about it staying the same for at least the first year you have the mortgage. You can plug each of these numbers into a mortgage calculator to see the difference in your monthly payment.  Don't be fooled by an interest only loan because the payment is much lower, it will go WAY up after the 1, 3, or 5 years that it's fixed for.  You're also not paying down ANY principal with an interest only loan so be very careful.

Remember that this is a very tough economy right now so if you can afford the fixed rate mortgage I highly recommend it. You don't want to get stuck into an ARM rate because interest rates are at an all time low right now so they cant go much lower. The only reason to get an adjustable rate instead of a fixed rate is in hope for rates to lower. Currently you can get a mortgage with a 5% interest rate so how much lower could it go before you start saving a lot of money? Especially when assuming the risk of rates going up and losing a lot of money. If you opt into an ARM rate it will be very difficult to get out of because the fixed rate is always a little bit higher than the adjustable. So you would have to refinance and raise your interest rate in order to get back into the fixed rate.

My free mortgage calculator will help your through this process. I suggest looking at all of the current interest rates and placing all of the scenarios next to each other before making your final decsion. It's the smart way to go about buying a home or getting any type of mortgage loan.