updated 10/30/2006 9:06:11 AM ET 2006-10-30T14:06:11

Homeowners with adjustable-rate mortgages worry about rising interest rates, but many believe they will be able to refinance their loans if necessary, according to a study released Monday.

An survey of homeowners conducted for Wells Fargo & Co., the San Francisco-based bank, found that about one in seven respondents had an adjustable-rate mortgage, or ARM.

With an ARM, the interest rate rises or falls, often in lockstep with an underlying security such as a Treasury bond.

The study found that nearly 80 percent of homeowners with ARMs said they were “somewhat” concerned, “very” concerned or “extremely” concerned about rate increases.

But more than half said they believed they could refinance their loans. And about 20 percent said they were prepared for rate adjustments and didn’t plan any changes.

Doreen Woo Ho, president of Wells Fargo’s consumer credit group, said that homeowners “still have the ability to refinance now.” She noted that “while rates are higher than a year ago, they’re still low by historical standards.”

The mortgage company Freddie Mac reported last week that the interest rate on 30-year, fixed-rate mortgages averaged 6.40 percent in the most-recent survey period. A year earlier, the rate was 6.15 percent.

Wells Fargo’s third annual homeowners study also found that homeowners expect their properties to appreciate, although they apparently are aware that price increases are slowing.

Some 10 percent said they expected their home values to increase a lot, 53 percent said they’d increase “a little,” and 27 percent said they’d stay the same. The rest expected a decline or weren’t sure.

Woo Ho said that one surprising finding was that younger homeowners — especially those born since 1964 — view their homes as a good investment as well as a place to live.

Overall, 72 percent of those surveyed said that the equity in their home was their most important investment, she said.

“That’s a shift,” Woo Ho said. “A home is now considered a major part of homeowners’ financial portfolios.”

The survey of more than 1,300 homeowners was conducted by the ICR of Media, Pa., and the margin of error was about 3 percent.

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Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com