A twist on the Arm

Mortgage finance

With US housing prices on a seemingly unstoppable upward trajectory for the best part of a decade, it has been increasingly difficult for first-time buyers to get on to the property ladder. Many have turned to a growing range of exotic mortgages, offering low teaser rates and a low minimum payment for an initial period - effectively enabling homebuyers to borrow more.

However, 17 consecutive interest rate increases by the US Federal Reserve between June 2004 and June 2006 means some of these