Fixed vs. Adjustable Mortgage Rates: Which One Makes Sense?
10/01/2025
Choosing the right mortgage can feel a lot like choosing the right path forward. You want stability, but also flexibility. At TruBank, our job is to help you weigh the options so you can move confidently toward homeownership.
Fixed-Rate Mortgages
With a fixed-rate mortgage, your interest rate (and monthly payments) stays the same for the life of the loan. That predictability is reassuring and useful for financial planning or budgeting. Fixed loans often start a bit higher than adjustable options, but many buyers find the long-term stability worth it.
Adjustable-Rate Mortgages (ARMs)
An ARM starts with a fixed rate for a set period (commonly 5, 7, or 10 years). After that fixed period, the rate adjusts at set time periods. This means your payments could go down if rates fall, but they could also rise if rates climb again. ARMs can be appealing if you plan to sell or refinance before the adjustment period kicks in. A couple examples of ARM options include 5/5 ARM and 7/1 ARM. The 5/5 ARM is fixed for 5 years and then adjusts every 5 years for the remaining term of the loan. The 7/1 ARM is fixed for 7 years and then adjusts every year for the remaining term of the loan.
Where Rates Stand Now
- The average rate on a 30-year mortgage was 6.26% as of September 18th, which was the lowest level in nearly a year after the Federal Reserve recently cut rates.
- The July 2025 Economic & Housing Outlook report projects the 30-year fixed mortgage rate will be around 6.0% for 2026.
- As the rate of inflation declines, economists expect housing rates to follow suit. It is difficult to predict how long this will take with tariffs and unemployment uncertainty.
How to Decide What is Right for You
There’s no one-size-fits-all mortgage. ARMs may look especially attractive in the short term, but long-term affordability depends on how the economy moves. Factors to think about include how long you plan to stay in your home, your comfort level with potential payment changes, and your overall financial goals and budget.
Conclusion
Mortgage rates may be easing but choosing between fixed and adjustable is still a big decision. The good news? You don’t have to figure it out alone. At TruBank, our lenders are here to walk you through the options so you can find a loan that fits your life today and work for you in the years ahead.