Hedging strategy against variable-rate mortgage?

We all know that variable-rate home mortgage usually offers a lower rate than than the fixed-rate one (if compared at the same moment in time). Does it work for an average home buyer to do the following: borrow at a variable (lower) rate, and use a hedging strategy, such as buying a T-note futures or options (or any other market instrument of the interest-rate markets) ? Simply put, the idea is this: we use low mortgage rate, and if it goes up later, we will lose on the higher mortgage payment, but our investment in the interest-rate market will also go up, so we will gain a similar amount to offset the rise of mortgage payments.

I know, large corporate land and real estate owners and maybe home builder companies do that, but does the same approach work to save money for individual home-buyer?

If you have knowledge in this field, please let me know which instrument can I buy (or short) for such hedging?
The interest-rate instrument (stock/futures/options) used here needs to meet 2 criteria: large leverage, small per-share price (because of the need to sell it little-by-little as I keep paying off and reducing the outstanding mortgage size). Thanks!
Dear jw,

thanks for your answer, it was very helpful. I’d like to reply to your idea of using a CD account or Money Market – the problem is that if I have a $ 300k mortgage, I will need another $ 300k (of cash) to put on the CD – most of the time, people do not have the money (or else they wouldn’t need to borrow). That’s why I mentioned *leverage* (such as exists in futures/options) – because only a small fraction of the capital is required to buy these. Would you be so kind to comment on this? Thanks

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