For whom is an adjustable-rate loan generally considered unsuitable?

An adjustable-rate loan is generally considered unsuitable for someone about to retire because such individuals typically prioritize stability and predictability in their financial situations. As retirement approaches, individuals often seek to minimize financial risks and uncertainties. An adjustable-rate mortgage, which has interest rates that can fluctuate based on market conditions, may create a situation where the monthly payments become unexpectedly high, potentially jeopardizing a retiree's fixed income budget.

In contrast, investors or first-time homebuyers may find adjustable-rate loans beneficial depending on their financial strategy, risk tolerance, or anticipated time in the property. Families with stable income may also have a greater capacity to manage fluctuating payments. Thus, for someone nearing retirement who may be on a fixed income and prioritizes long-term financial security, an adjustable-rate loan is less suitable.