ARM Loan Windfall

I always heard, and I think this was the case, that the beginning of the end for the real estate market would be when the fixed rate periods ended for all the adjustable loans taken out by people who could only qualify for the teaser. The payments would jump far beyond what they could afford.

I have an ARM myself, but it doesn’t adjust for another two years, and will be 2.25% above the LIBOR. I was looking up the index and found that it is so low (currently .91%), my payment would be cut nearly in half if it adjusted now. I don’t know what it is going to do over the next two years, but hopefully it will stay down.

Has this been the norm lately, for people with adjustable mortgages to catch a break when the teaser ends? Has anyone here had a large drop in their payment coming off of the fixed rate?