How adjustable-rate mortgages really move
ARM or fixed?
In brief
An ARM can make sense when the initial rate is meaningfully lower, you expect to move or refinance before or near the first adjustment, and you can afford the worst case. A fixed-rate loan makes sense when you value certainty or plan to stay long term. Compare Loan Estimates for both on the same day.
Last reviewed against the primary sources listed below.
Framework
| Question | Leans ARM | Leans fixed |
|---|---|---|
| How long will you keep the loan? | Shorter than the fixed period | Long term |
| Can you afford the worst case? | Yes | No |
| Comfort with change | High | Low |
Compare
See the CFPB comparison.
ARM questions
Is an ARM a good idea now?
It depends on the gap between ARM and fixed offers, how long you will keep the loan and whether you can afford the worst case.