Fixed-Rate vs. Adjustable-Rate Mortgages: Which Is Right for You?

Short answer: A fixed-rate mortgage locks your interest rate for the life of the loan. An adjustable-rate mortgage (ARM) starts with a lower fixed rate for an initial period, then adjusts periodically based on market conditions.

Fixed-rate mortgages

Your rate and principal-and-interest payment never change, regardless of what happens in the broader rate environment. This predictability is why fixed-rate loans are the most common choice, especially for buyers planning to stay in a home long-term.

Adjustable-rate mortgages (ARMs)

ARMs typically offer a lower initial rate for a fixed period (common structures are 5, 7, or 10 years), after which the rate adjusts periodically based on a market index. This can make sense if you plan to sell or refinance before the adjustment period begins, or if you expect rates to fall.

The real question to ask yourself

The right choice usually comes down to how long you expect to stay in the home and how much risk you’re comfortable taking on future rate changes. There’s no universally “better” option — it depends on your specific plans.

Compare your options

Talk to us about your timeline and goals, and we’ll help you compare fixed and adjustable options across our lender network.