The Clark Howard Podcast 04.01.26 Adjustable Rate Mortgages - A Waning / High Deductible Health Plans
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Apr 1, 2026 A warning about the renewed popularity of adjustable-rate mortgages and the reset risk that can cost homeowners. Scenarios where a short-term ARM might make sense and myths about HELOC tax deductibility. A deep dive into why health care costs are exploding and why high-deductible or catastrophic plans can be dangerous for many. Practical tips on disputing surprise medical bills and finding cheaper prescriptions.
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ARM Basics And Reset Risk
- Adjustable-rate mortgages (ARMs) offer substantially lower initial rates (often ~1% less) with fixed periods like five or seven years.
- The risk is a later reset to an unknown index rate that can spike payments and trap borrowers who lack equity to refinance.
Only Use ARMs If You Have Substantial Equity
- Use an ARM only if you have large upfront equity or big cash reserves that reduce refinance risk.
- Clark recommends ARMs for buyers who sold a prior home and can put significant down payment to avoid being dependent on future home-price appreciation.
Avoid ARMs To Stretch Affordable Limits
- Don't use an ARM to stretch into an otherwise unaffordable home.
- Clark warns this tactic exposes buyers to payment shocks if home values stagnate and refinancing isn't possible.