This from a large bank's flagship loan product: "Increased monthly and yearly cash flow (see example below)" http://www.worldsavings.com/servlet/wsavings/loans-new/pick-a-payment.html You CANNOT increase your cashflow by borrowing money. The interest keeps accruing on the loan and the law of compound interest is effectively working against you. These mortgage places get a bunch of 23 year olds and pay them huge commissions to sell these loans to unsuspecting people. The customer's brain shuts off after hearing "lower monthly payment" and they sign. Then a few years down the road they realize that they owe $265k instead of $250k and now their rates are increasing as well. Higher rate on a larger balance. Pair this with the subprime meltdown and the constant building of the large homebulders and supply is going to increase exponentially. Many mortgages are a time bomb and the worst part is that the people who have them don't even realize it. Yet.