Understanding Fixed vs. Adjustable-Rate Mortgages

One of the first big decisions homebuyers face is choosing between a fixed-rate mortgage and an adjustable-rate mortgage (ARM). Both loan types have advantages and disadvantages depending on your financial goals and timeline. At Jaffe Home Loans, we believe in helping you understand your options so you can make the right choice.

What Is a Fixed-Rate Mortgage?

A fixed-rate mortgage locks in your interest rate for the life of the loan. Your monthly principal and interest payments never change, making it easy to budget long-term. Fixed-rate loans are especially attractive if you plan to stay in your home for many years or prefer predictable payments.

What Is an Adjustable-Rate Mortgage (ARM)?

An ARM typically starts with a lower introductory rate for a set number of years—often 5, 7, or 10—before adjusting periodically based on the market. That means your monthly payment could rise or fall over time. ARMs are often chosen by buyers who plan to move, sell, or refinance before the adjustment period begins.

Pros and Cons at a Glance:

Fixed-Rate Mortgages:

- Pros: Stability, predictability, long-term security.

- Cons: Higher initial rate compared to ARMs.

Adjustable-Rate Mortgages:

- Pros: Lower initial rate, potential short-term savings.

- Cons: Uncertainty if you keep the loan beyond the introductory period.

How to Decide Which Loan Is Right for You

The right choice depends on your financial situation and long-term plans. If you’re buying your “forever home,” a fixed-rate loan may provide peace of mind. If you’re purchasing a starter home or anticipate refinancing, an ARM could offer short-term savings.

How Jaffe Home Loans Can Help

We’ll review your goals and run the numbers side by side so you can see the difference over time. Our role is to help you weigh the risks and benefits of each option to make the choice that best supports your financial future.