When financing a home, buyers often need to choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).

Understanding the differences can help you make a confident decision.

Fixed-Rate Mortgage

A fixed-rate mortgage offers:

• Stable monthly payments
• Predictable budgeting
• Long-term consistency

Many buyers prefer knowing their principal and interest payments will remain unchanged.

Adjustable-Rate Mortgage

An ARM typically starts with a lower interest rate for a set period before adjusting based on market conditions.

Potential benefits include:

• Lower initial payments
• Increased buying power
• Flexibility for short-term ownership

Which Option Is Right?

A fixed-rate loan may work best if:

• You plan to stay long term
• You prefer predictable payments

An ARM may work best if:

• You expect to move within a few years
• You understand the risks of future rate changes