Interest-only loans represent a somewhat higher risk for lenders, and therefore are subject to a slightly higher interest rate. Combined with little or no down payment, the adjustable rate (ARM) variety of interest-only mortgages are sometimes indicative of a buyer taking on too much risk—especially when that buyer is unlikely to qualify under more conservative loan structures. Because a homeowner does not build any equity in an interest-only loan he may be adversely affected by prevailing market conditions at the time the borrower is ready to either sell the house or refinance. The borrower may find themselves unable to afford the higher regularly amortized payments at the end of the interest-only period, unable to refinance due to lack of equity, and unable to sell if demand for housing has weakened.