Alpine Mortgage
(201) 488-8809

Fixed vs Adjustable Mortgage Rates: Which Is Right for You?

When shopping for a home loan, one of the first decisions you’ll face is choosing between a fixed rate mortgage and an adjustable-rate mortgage (ARM). While both options have their pros and cons, the right choice depends on your financial goals, how long you plan to stay in the home, and your tolerance for risk.

Let’s break down the key differences, benefits and drawbacks to help you make an informed decision.

Image of fixed vs adjustable rates

What Is a Fixed Rate Mortgage?

A fixed rate mortgage has an interest rate that remains the same throughout the entire loan term. This means your monthly principal and interest payments stay consistent, making it easier to budget long term.

Key Features:

  • Predictable monthly payments
  • Loan terms typically 15, 20, or 30 years
  • Best for long term homeowners

Pros:

  • Rate won’t change even if market rates rise
  • Simpler to understand and manage
  • Good for budgeting and financial planning

Cons:

  • Higher starting rate than ARMs
  • Less flexibility if you plan to move or refinance soon

What Is an Adjustable Rate Mortgage (ARM)?

An adjustable rate mortgage starts with a lower introductory interest rate that remains fixed for an initial period (usually 5, 7, or 10 years), after which the rate adjusts annually based on market conditions.

Key Features:

  • Lower initial rate than fixed mortgages
  • Rate adjusts after the intro period (e.g., a 5/1 ARM adjusts annually after 5 years)
  • Rate caps limit how much the rate can increase per year and over the life of the loan

Pros:

  • Lower initial monthly payments
  • Ideal if you plan to move or refinance within a few years
  • Potential to save money early in the loan

Cons:

  • Rates (and payments) can increase significantly after the intro period
  • Harder to budget long term
  • Not ideal in a rising rate environment

Fixed vs ARM Mortgage Rates Comparison

FeatureFixed-Rate MortgageAdjustable-Rate Mortgage (ARM)
Initial RateHigherLower
Rate StabilityStays the sameChanges after intro period
Payment PredictabilityVery predictableCan fluctuate
Best ForLong-term homeownersShort-term plans (move/refi)
Risk LevelLowModerate to high

Choosing between a fixed rate and an adjustable rate mortgage depends on your unique situation. At Alpine Mortgage, we help you weigh the pros and cons and find the loan that fits your lifestyle and goals. Alpine Mortgage maintains a team of highly skilled industry professionals familiar with the company’s fixed and adjustable rate products. 

Call us today at (800) 876-LOAN to speak with one of our mortgage specialists or click here to have one of our specialists contact you.

If you are interested in applying for a fixed or adjustable rate mortgage, you can apply online now.

Fixed vs ARM Rate FAQs

Yes. Many borrowers start with an ARM and refinance into a fixed-rate loan before the rate adjusts.

They can be if market rates rise significantly. However, most ARMs have caps on how much the rate can increase.

It’s an ARM with a fixed rate for the first 5 years, then adjusts once per year thereafter.


Fixed & ARM Rate Resources