Government-backed loan program
Popular mortgage loan option
Fixed-Rate vs ARM: Which Mortgage Type Saves You More?
Compare fixed-rate and adjustable-rate mortgages to decide which structure fits your timeline and risk tolerance.
Feature-by-Feature Comparison
See how Fixed-Rate Mortgage and Adjustable-Rate Mortgage (ARM) stack up
| Feature | Fixed-Rate Mortgage | Adjustable-Rate Mortgage (ARM) |
|---|---|---|
| Rate Type | Locked for entire term | Fixed intro period, then adjusts |
| Initial Rate | Higher | Lower (0.5-1% less) |
| Payment Predictability | Same every month | Changes after intro period |
| Best Timeline | 10+ years in home | 3-7 years in home |
| Risk Level | Low | Moderate to high |
| Refinance Need | Only if rates drop | Often before adjustment |
Which Loan Is Right for You?
Each loan type has ideal scenarios
The Bottom Line
Fixed-rate mortgages provide certainty and are ideal for long-term homeowners. ARMs can save money in the short term but carry risk of higher payments later. Choose fixed if you value stability; choose ARM if you have a defined exit strategy.
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Frequently Asked Questions
Common questions about Fixed-Rate Mortgage vs Adjustable-Rate Mortgage (ARM)
Frequently Asked Questions
After the initial fixed period (typically 3, 5, 7, or 10 years), your rate adjusts based on a market index plus a margin. Most ARMs have caps that limit how much the rate can increase per adjustment and over the life of the loan.
Yes, many borrowers refinance from an ARM to a fixed-rate mortgage before their adjustment period begins. This is a common strategy to lock in a rate.
This comparison is for informational purposes only and does not constitute financial advice. Rates, terms, and program availability are subject to change without notice and may vary based on creditworthiness, property type, loan amount, and other factors. Contact NMHL for current rates and personalized loan options. NMHL NMLS# 2557591. Equal Housing Lender.