Adjustable rate amortization mortgages are loans where the amount you pay depends on the rise or fall of interest rates. Some types of adjustable rate amortization mortgages offer payment caps than interest rate caps. This basically limits the increase amount of your monthly payment on your amortization mortgage and makes your loan negatively amortized. And if that's not enough, lowered home mortgage rates can be achieved through five or seven year balloon payments and a wide variety of adjustable rate mortgages. Adjustable Rate Home Mortgage Rates Home mortgage rates are sure to be affected more if you have an adjustable rate mortgage. This is because adjustable rate home mortgage rates depend largely on the changes in federal rates. The 5-year variable rate mortgage has an initial payment rate of 4.25% but for the duration of 5 years, the rate would be less 0.75%. The same goes for the 6-month variable rate mortgage. Prime (4.25%) is less 1.40% for 6 months followed by prime less 0.40% for the remainder of the term. The 3-month variable rate mortgage on the other hand has prime less 2.25% for 3 moths followed by Canadian Bank Prime less 0.375% with 1% cash back and airmiles. If you want to avoid PMI, you can take an 80 20 mortgage loan. With an 80 20 mortgage loan, you get a "piggyback loan" or second mortgage loan that is used to back up the first mortgage. The first mortgage is comprised of 80 percent of the home's price. The second loan is only for 20 percent minus the down payment. Adjustable-rate mortgage payments have characteristics that might ultimately prove risky in the long run. Because the dynamics of interest rates in the market are never certain, the amount of your adjustable-rate mortgage payments are uncertain as well. Adjustable-rate mortgage payments generally have lower initial interest rates compared to fixed-rate mortgages. Lenders who offer bad credit mortgage loans do not even take a second glance at your credit history. The important thing is you get your money and that's that. Speaking of lenders, which lending companies are offering bad credit mortgage loans among their list of loan programs? Several bad credit mortgage loans are being offered by some alternative loan companies.