What’s the Difference Between a Fixed-Rate and Adjustable-Rate Mortgage?

A Fixed-Rate Mortgage Keeps Your Payments Predictable

With a fixed-rate mortgage, your interest rate—and your monthly payment—stay the same for the life of the loan, whether that’s 15, 20, or 30 years. This is ideal if:

  • You plan to stay in the home long-term
  • You want stability and predictability
  • You’re concerned about rising interest rates in the future

It’s the “set-it-and-forget-it” option that gives many buyers peace of mind.

See what fixed-rate payments look like with our Conventional Purchase Loan or FHA Purchase Loan calculator to understand your long-term commitment.

An Adjustable-Rate Mortgage (ARM) Starts Lower—Then Changes

An ARM starts off with a lower interest rate for a set period—usually 5, 7, or 10 years. After that, your rate can adjust annually based on market conditions. This can be a great choice if:

  • You plan to move or refinance before the adjustment period
  • You want lower initial monthly payments
  • You’re comfortable with a little risk and flexibility

Just be aware: your rate could go up, which would increase your monthly payment.

Calculate your potential savings during the initial fixed period and explore different loan structures using our loan calculators to see if an ARM fits your timeline.

3. The Right Choice Depends on Your Timeline and Risk Tolerance

If you’re in it for the long haul, fixed-rate gives you certainty. But if you’re buying a starter home or planning a short stay, an ARM might offer upfront savings. The key is knowing your goals and how much rate movement you’re comfortable with.

Use our Compare 2 Rates calculator to see the total interest difference between fixed and adjustable rate scenarios over your expected ownership timeline.

Want to Choose the Right Rate Structure for Your Timeline?

Fixed vs. adjustable isn’t about which is better—it’s about which matches your plans. Here’s how to decide:

📊 Compare total costs with our Compare 2 Rates calculator over your ownership period

🏡 See fixed-rate options with Conventional Purchase Loan or FHA Purchase Loan calculators

💰 Explore all loan types at our loan calculators page to find what fits your strategy

📚 Learn about first-time buyer options at our buy a house page

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