Adjustable rate mortgages (ARMs) weren't even available in the US until 1982, Congress didn't allow them. They're still around, the type you describe is a 5/1 ARM. Fixed rate for 5 years, adjusts every year after that. 3, 5, 7, and 10 year ARMs are common. A 5/1 loan rate is about 1% lower than a 30 year fixed now. It doesn't make much sense to me to take the risk with rates as low as they are now.