Fixed Rate Mortgage vs Adjustable-Rate Mortgage: What’s the Difference and Which Should You Choose?
When it comes to financing a home, one of the most important decisions you’ll make is choosing between a Fixed Rate Mortgage and an Adjustable Rate Mortgage (ARM). Both loan types come with unique benefits, and the right choice depends on your goals, financial situation, and how long you plan to stay in your home.

Let’s break down the key differences and help you figure out which might be the better fit.

What is a Fixed Rate Mortgage?

A Fixed Rate Mortgage is exactly what it sounds like: a loan with an interest rate that stays the same for the entire term of the loan. Whether you choose a 15-year or 30-year term, your monthly principal and interest payments remain consistent, which makes budgeting easier and offers long-term peace of mind.

Benefits of a Fixed Rate Mortgage:

1. Predictability: Your interest rate and monthly payment never change.

2. Stability: Great for those planning to stay in their home long-term.

3. Simplicity: Easier to understand terms and paperwork.

4. Peace of mind: Protected from market fluctuations and rising rates.

With a Fixed Rate Mortgage, you’re locking in today’s rate for the life of your loan – and in a rising rate environment, that could mean significant savings over time.

What is an Adjustable-Rate Mortgage (ARM)?

An Adjustable-Rate Mortgage (ARM) typically offers a lower starting interest rate than a fixed rate loan, saving you thousands during the initial fixed-rate period. After that initial term, the interest rate adjusts periodically based on market conditions.

ARMs are often written as 3/1, 5/1, 7/1, or 10/1, where the first number represents the length of the fixed-rate period in years, and the second number tells you how often the rate can adjust afterward (usually once a year).

Benefits of an ARM:

1. Lower initial rates – some of the lowest we offer.

2. Big savings upfront – potentially thousands less than a fixed rate loan.

3. Flexible options – ideal if you plan to move or refinance in 5, 7, or 10 years.

4. Lower initial payments – free up cash flow for other goals or debt.

If you're expecting a higher income, planning a move, or just want to lower your payment in the short term, an ARM could be the smart move.

What Happens When the Rate Adjusts?

Once the fixed period ends, the interest rate adjusts at regular intervals. But don’t worry – rate caps are built in to limit how much your rate can change each year and over the life of the loan, offering some protection from major jumps.

Which Loan Is Right for You?
Here’s a quick way to decide:

Choose a Fixed Rate Mortgage if:

1. You’re planning to stay in your home for a long time.

2. You want consistent monthly payments.

3. You’re buying in a rising rate environment and want to lock in your rate.

Choose an ARM if:

1. You plan to sell or refinance in the next 5–10 years.

2. You want the lowest possible rate right now.

3. You’re comfortable with the potential for rate changes later on.

Why Work With Us?
Whether you're leaning toward a fixed rate or ARM, we’re here to help. Our -licensed Loan Officers will work with you one-on-one to understand your goals and match you with the right loan program.

1. Timely closings – typically in 30 days or less

2. Direct lender – quick answers and personalized guidance

3. FHA ARMs available

4. Down payments as low as 3% (FHA) or 5% conventional

Let’s Find the Right Mortgage for You
Still unsure which mortgage is best for your situation? Let’s talk it through! We’ll walk you through your options, run the numbers, and help you feel confident in your decision. Contact us today to get started or get pre-approved. 888-616-9885