Mortgages come in two basic flavors when it comes to the interest rate: fixed and adjustable. The right choice depends on how long you plan to keep the loan and your comfort with change.
Fixed-rate mortgage
The interest rate stays the same for the entire life of the loan, so your principal and interest payment never changes. It is predictable and the most popular choice for long-term homeowners.
Adjustable-rate mortgage (ARM)
An ARM offers a lower fixed rate for an initial period, often five, seven, or ten years, and then adjusts periodically based on the market. It can save money upfront but carries the risk of higher payments later.
Which one fits
- Choose fixed if you plan to stay long term or want certainty
- Consider an ARM if you expect to move or refinance before it adjusts
ARMs are not one-size-fits-all. We will only recommend one if the initial savings clearly fit your timeline.