Fixed or adjustable: how to choose

A fixed rate stays the same for the life of the loan. An adjustable rate starts lower for a few years and then moves with the market.

How a fixed rate works

Your principal and interest payment never changes. Taxes and insurance can still go up, but the loan part stays the same for 15 or 30 years. Most buyers choose a fixed rate for that certainty.

How an adjustable rate works

A 7/6 ARM has a fixed rate for the first seven years, then adjusts every six months. Caps limit how much it can rise at the first change, at each later change and over the life of the loan.

When an ARM can make sense

If you expect to sell or refinance within the fixed period, the lower starting rate can save money. If you plan to stay for a long time, the risk of higher payments later matters more.

Ask for both

We quote a fixed rate and an ARM side by side, with the highest payment the ARM could reach under its caps. Then the choice is about your plans, not a guess.