Fixed vs adjustable rate mortgage

A fixed-rate mortgage keeps the same interest rate for the entire term. Your principal and interest payment does not change. An adjustable-rate mortgage (ARM) has an initial fixed period, after which the rate can change based on an index, which can raise or lower your payment.

Fixed rates give you predictability; ARMs may offer a lower initial rate but add uncertainty later. When comparing offers, compare fixed to fixed and ARM to ARM—mixing them in the same comparison can be misleading.

If you’re considering an ARM, check the initial period, how often the rate can change, and the caps. When you have quotes from multiple lenders for the same product type, line them up side by side to compare rate, APR, and fees.

Using a comparison tool lets you enter each lender’s quote and view them in one place. That way you can see how fixed and ARM offers differ, and how lenders compare within each category.