This update explains fixed-rate and adjustable-rate mortgages, typical terms (15-, 30-year; 3/1, 5/1, 7/1 ARMs), and current market effects in Michigan. Since pandemic lows, rates rose, reducing refinance volume and affecting affordability; foreclosure and price trends vary by locality. Borrowers should weigh stability vs. short-term savings and verify current local data before acting.

Why Michigan mortgage choices matter

Michigan homeowners shop mortgage products when rates, home values, or personal finances change. Fixed-rate and adjustable-rate mortgages (ARMs) remain the two main choices. Each suits a different borrower profile and risk tolerance.

Common mortgage types and typical terms

Fixed-rate mortgages

A fixed-rate mortgage keeps the interest rate and monthly principal-and-interest payment the same for the life of the loan. Typical terms are 15 and 30 years; 10-, 20-, and other terms exist but are less common. Fixed loans offer predictability, which many homeowners prefer when they plan to stay in a property long term.

Adjustable-rate mortgages (ARMs)

ARMs set a fixed rate for an initial period, then adjust periodically. Common structures are 3/1, 5/1 and 7/1 ARMs: the first number is the years of the initial fixed period; the second is how often the rate adjusts after that (annually in these examples). ARMs can offer lower initial rates but expose borrowers to future rate changes.

When to consider each

Choose a fixed-rate loan if you prioritize payment stability or expect rates to rise. Consider an ARM if you plan to sell or refinance before the adjustment period ends, or if you can tolerate some interest-rate risk in exchange for a lower initial rate.

Market context and recent trends (2025)

Mortgage markets have shifted since the pandemic-era lows. Interest rates rose when policymakers tightened monetary policy to control inflation, and rates have remained above the record lows seen in 2020-2021. That change affected refinancing activity and borrower affordability.

Housing markets also moved unevenly. Home prices jumped in many areas during 2020-2022, then cooled or flattened in several markets as rates climbed. Foreclosure activity increased in some regions after those rate and affordability shifts, though trends vary by county and loan type.

Refinancing volumes dropped compared with the low-rate years because fewer homeowners can reduce their rate enough to justify closing costs. That dynamic has left many owners with older, lower-rate loans in place, while new buyers face higher borrowing costs.1

Practical takeaways for Michigan borrowers

  • Compare 30-year fixed and multi-year ARMs (3/1, 5/1, 7/1) for your timeline and risk tolerance.
  • Run the math on closing costs for a refinance versus the monthly savings.
  • Watch local housing market signals - inventory, price movement, and foreclosure filings - before buying or refinancing. 2
  • Get preapproved and discuss rate-lock options with lenders to manage short-term rate moves.
If you need current rate quotes or county-level foreclosure data, contact a licensed mortgage lender or consult recent reports from the Mortgage Bankers Association (MBA) and state housing agencies. 3
  1. Verify current average 30-year fixed mortgage rate (Aug 2025) from a reliable source (e.g., Freddie Mac Primary Mortgage Market Survey).
  2. Check Michigan-specific foreclosure filings and trends for 2023-2025 (state or county records, MBA reports).
  3. Confirm recent Michigan home price changes (2020-2025) using an authoritative index (e.g., Case-Shiller, FHFA, or state MLS data).
  4. Confirm refinancing volume trends and any cited percentages for 2023-2025 using MBA or Federal Reserve data.

FAQs about Michigan Mortgage Rates

What is the main difference between a fixed-rate mortgage and an ARM?
A fixed-rate mortgage keeps the interest rate and monthly principal-and-interest payment constant for the loan term. An ARM has a fixed initial rate for a set period, then the rate adjusts periodically, which can raise or lower your payment.
When is an ARM a good choice in Michigan?
An ARM can make sense if you plan to sell or refinance before the adjustment begins, or if you accept some future rate risk in exchange for a lower initial rate. Evaluate how long you expect to keep the home and potential rate scenarios.
Should I refinance now to lower my mortgage rate?
Refinancing makes sense if your new rate and term reduce total costs after closing fees and you plan to keep the loan long enough to recoup those costs. Because market rates have been higher than pandemic lows, refinancing benefits are less common than in 2020-2021; run the numbers or consult a lender.
Are foreclosures increasing in Michigan?
Foreclosure activity rose in some Michigan areas after rate and affordability shifts, but patterns vary by county and loan vintage. Check recent county-level filings or MBA and state housing data for the most up-to-date picture.

News about Michigan Mortgage Rates

Current Mortgage Rates: December 5, 2025 - money.com [Visit Site | Read More]

Homebuyers are waiting for 6% mortgage rates — When could it actually happen? - CNBC [Visit Site | Read More]

A Michigan credit union offers a 4.99% mortgage to turn heads but what will Fed do next? - Detroit Free Press [Visit Site | Read More]

Mortgage Rate History: 1970s To 2025 - Bankrate [Visit Site | Read More]

Fed Governor Cook's mortgages: What's known and what's not - Reuters [Visit Site | Read More]

Michigan Credit Union Offering a 4.99% 30-Year Fixed Mortgage Rate Special - The Truth About Mortgage [Visit Site | Read More]

Current mortgage trends: Will mortgage rates go down in 2025? - Business Insider [Visit Site | Read More]

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