Types of Mortgages: Fixed-Rate vs. Adjustable-Rate

When you’re buying a home, one of the biggest choices you’ll make is the type of mortgage you choose. The two most common options are fixed-rate mortgages and adjustable-rate mortgages (ARMs). Understanding the difference can help you feel more confident and make the decision that best fits your lifestyle and financial goals.

Fixed-Rate Mortgage

A fixed-rate mortgage means your interest rate stays the same for the entire term of the loan, whether that’s 15, 20, or 30 years.

Key benefits:

• Consistent monthly payments for the life of the loan.

• Easier to budget and plan long-term.

• Protection from future interest rate increases.

  
  

Best for: Homebuyers who want stability and plan to stay in their home for many years.

Adjustable-Rate Mortgage (ARM)

An adjustable-rate mortgage (ARM) starts with a lower fixed interest rate for an initial period (commonly 5, 7, or 10 years). After that, the rate adjusts periodically based on the market.

Key benefits:

• Lower initial interest rate compared to fixed-rate loans.

• Potentially lower monthly payments during the introductory period.

• Can be a smart option if you plan to move or refinance before the rate adjusts.

  
  

Best for: Buyers who need flexibility, don’t plan to stay in the home long-term, or want lower payments upfront.

Which One Should You Choose?

• If you value predictability and long-term stability, a fixed-rate mortgage may give you peace of mind.

• If you’re comfortable with some risk and want lower initial payments, an ARM could be a good fit.

  
  

Ultimately, the right choice depends on your goals, timeline, and financial situation.

Ready to Find the Best Fit?

Choosing between fixed-rate and adjustable-rate mortgages doesn’t have to be overwhelming. With the right guidance, you can find a loan that matches your lifestyle and gets you closer to the keys to your new home.