Brian, Its very difficult to answer your question. A lot of option arms were originated with extremely high margins. Margin was how banks made profit. Your interest rate consists of index + margin. There were several different indices on which the option arm was based on depending on who the investor was. Lender/broker don't have control of the index. The index fluctuates with the market but the margin was set by the lender and/or broker depending on who orginated your loan. When your option arm expires you will only benefit as much as your margin will allow you to. I would recommend you speak to your trusted mortgage advisor to give you a solid answer by reviewing your current mortgage information.

There are a lot of difffering opinions about how long rates will remain low, but my opinion is that they are unlikely to go lower than right now. The government's mortgage-backed security purchase program, partially responsible for artificially lowering rates over the past year, is set to expire at the end of this month, and there is a lot of talk that higher rates could follow heading into April.

Although there is no way to know for sure, it's a pretty good assumption based on the mortgage backed securities that the interest rate will start to rise. I would suggest beginning to explore your options of refinancing to a fixed rate by contacting a lender to review your current loan. Depending on your loan to value ratio of your home, a lender will be able to access your current loan and provide you with information on refinancing to a fixed rate, so you will be better able to make an educated decision on whether to continue in your current loan or refinance.