There are two certainties with lenders: They incur a cost to the money that they lend, and they are in the business of making a profit. Their offset to lending at below market rates could be in the fees, penalties or new rates that they charge. Most of the time below market rates translate into negative amortization. That is when the difference between the below market rate and the market rate is added to your principle. The result is the amount of money you owe goes up, not down. The lender will also probably increase your rate in the future. If you think you can refinance out before the lender increases the rate, be prepared for a hefty prepayment penalty. In other words, there are no free lunches.