Choosing the wrong mortgage type could cost you thousands. Here’s how to make the right move based on your goals and timeline.
With interest rates stabilizing but still higher than pandemic-era lows, buyers in 2025 are paying close attention to their mortgage structure. Two of the most common options—Fixed-Rate Mortgages (FRMs) and Adjustable-Rate Mortgages (ARMs)—offer different advantages depending on your plans, budget, and risk tolerance.
Understanding the pros and cons of each can help you secure a loan that aligns with your long-term financial goals.
Fixed-Rate Mortgages (FRMs)
- Rate stays the same for the life of the loan (typically 15, 20, or 30 years)
- Monthly payments are predictable and stable
- Ideal for long-term buyers who plan to stay in the home for many years
- Protects against future rate increases
Adjustable-Rate Mortgages (ARMs)
- Offers a low introductory interest rate for a fixed period (e.g., 5, 7, or 10 years)
- After the initial period, the rate adjusts annually based on market conditions
- Lower initial payments may increase affordability or buying power
- Best suited for buyers who plan to move, refinance, or sell before the adjustment period
Which Is Right for You?
Choose a fixed-rate loan if:
- You value long-term payment stability
- You plan to stay in the home for 10+ years
- You’re concerned about future interest rate hikes
Choose an ARM if:
- You expect to relocate or refinance in the near future
- You want to take advantage of a lower initial rate
- You have flexibility and a higher tolerance for market movement
Myth: Adjustable-rate mortgages are risky and outdated.Fact: ARMs can be a smart financial strategy when used properly—especially in high-rate environments. The key is to understand the terms, including caps, adjustment schedules, and potential payment increases after the fixed period ends.
Still deciding which loan type fits your situation? We can help you compare options, run payment scenarios, and find the structure that aligns with your goals—short-term or long-term.
Contact LoanWorks at (Sales Info)for a free mortgage strategy session.
📞 855-LOANWORKS (855.562.6769)
✉️ Sales@LoanWorks.ai
Disclosures: LoanWorks, Inc. is a mortgage broker licensed in multiple states. All information provided on this blog is for general informational purposes only and does not constitute an offer to lend or a commitment to approve any loan. Loan terms, rates, and eligibility are subject to change without notice and may vary based on creditworthiness, property type, and other factors. Not all applicants will qualify.LoanWorks, Inc. does not guarantee approval, rate, or term and does not make any express or implied claims about the availability of specific programs or products.
By refinancing an existing loan, total finance charges may be higher over the life of the loan. Always consult with a licensed LoanWorks representative for details specific to your financial situation.
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