Fixed-Rate vs. Adjustable-Rate Mortgage — Which One Is Right for You?

Choosing the Right Mortgage Starts Here

When it comes to home loans, one of the biggest decisions you’ll make is whether to choose a fixed-rate mortgage (FRM) or an adjustable-rate mortgage (ARM). Both have advantages — but the right option depends on your long-term plans and financial goals.

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1. What Is a Fixed-Rate Mortgage?

A fixed-rate mortgage means your interest rate stays the same for the entire term — typically 15 or 30 years.
Pros:

• Predictable monthly payments

• Long-term stability

• Easier budgeting

Best for: Homebuyers who plan to stay in their home for many years or prefer consistency over risk.

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2. What Is an Adjustable-Rate Mortgage (ARM)?

An ARM starts with a lower rate for an initial period (like 5, 7, or 10 years), then adjusts periodically based on market conditions.

Pros:

• Lower initial payments

• Great if you plan to move or refinance within a few years

Cons:

• Rates can increase later

• Harder to predict future payments

Best for: Buyers who expect to relocate, upgrade, or refinance before the fixed period ends.

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3. Which One Saves You More?

In the short term, an ARM may look cheaper — but if rates rise, it could cost you more in the long run.
A fixed-rate mortgage offers peace of mind, even if initial rates are slightly higher.

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4. The Bottom Line

There’s no one-size-fits-all answer.

• Choose Fixed-Rate if you want stability and plan to stay long-term.

• Choose ARM if you want to save early and expect to move within 5–10 years.

Before deciding, talk with a licensed mortgage advisor who can run the numbers for your specific situation.