Rates & Loans
What is the difference between a fixed-rate and adjustable-rate mortgage?
Updated Jul 1, 2026
The short answer
A fixed-rate mortgage keeps the same interest rate and principal-and-interest payment for the entire loan term, giving you predictability. An adjustable-rate mortgage (ARM) starts with a fixed period and then adjusts periodically based on a market index, so your payment can rise or fall. Fixed loans favor stability; ARMs can offer a lower initial rate but carry the risk of future increases.
Key points
- Fixed: same rate and P&I payment for the full term.
- ARM: fixed intro period, then periodic adjustments.
- ARMs can start lower but may rise later.
- Choice depends on how long you’ll keep the loan.
Who each suits
A fixed rate suits buyers who value certainty or plan to stay put. An ARM may suit someone confident they will sell or refinance before the fixed period ends — but that plan carries risk if circumstances change.
Put this to work
Sources
Every claim above traces to a public government source.