When buying a home in Wisconsin, one of the most important decisions you’ll make isn’t just where to live—it’s choosing the right mortgage type. Specifically, deciding between a fixed-rate mortgage and an adjustable-rate mortgage (ARM) can have a major impact on your monthly payment and long-term financial comfort.

With today’s changing interest rate environment, understanding how each option works—and which fits your goals—is more important than ever.

Understanding the Difference

Fixed-Rate Mortgage

A fixed-rate mortgage keeps the same interest rate for the entire loan term, typically 15 or 30 years.

Advantages

• Predictable monthly payments

• Protection from rising interest rates

• Easier long-term budgeting

Considerations

• Higher starting rate compared to ARMs

• Less flexibility if rates decrease in the future

Adjustable-Rate Mortgage (ARM)

An ARM starts with a lower introductory rate for a set period—commonly 3, 5, 7, or 10 years—then adjusts periodically based on market rates.

Advantages

• Lower initial interest rate

• Lower monthly payment early on

• Can help buyers qualify for more home

Considerations

• Payment can increase after the fixed period

• More uncertainty long term

Why This Decision Matters for Wisconsin Buyers

Wisconsin’s housing market varies widely—from competitive city markets to more affordable rural areas. Because of that, buyers often have different priorities when it comes to monthly payments and long-term stability.

Many Wisconsin buyers are weighing:

• Predictable payments vs. short-term savings

• How long they plan to stay in the home as you will have to re-qualify to refinance to another loan option

• Whether refinancing or moving is likely in the future

Which Option Makes Sense for You?

Buyers Planning to Stay Long-Term

A fixed-rate mortgage is often the best choice if you plan to stay in your home for 10 years or more. It offers stability and protects you from future rate increases, which can be especially valuable if you’re buying a long-term or “forever” home.

Buyers Expecting Change in the Near Future

An adjustable-rate mortgage may make sense if you expect to:

• Move within 5–7 years

• Refinance later

• Experience income growth

The lower initial payment can improve affordability now while still giving you flexibility later.

Buyers Focused on Monthly Payment

If keeping the monthly payment as low as possible is your priority, comparing both loan types side by side is essential. In some cases, an ARM can provide short-term savings, while a fixed rate offers long-term peace of mind.

Example Scenario

Consider a Wisconsin buyer purchasing a $350,000 home with strong credit:

• 30-year fixed-rate loan: Higher initial rate but consistent payment for the life of the loan

• 5-year ARM: Lower payment for the first five years, with potential increases afterward

If the buyer plans to sell or refinance within a few years, the ARM could save money upfront. If the buyer plans to stay long term, the fixed rate may be the safer option.

Final Thoughts

There is no universal answer when choosing between fixed and adjustable rates. The right choice depends on your timeline, financial goals, and comfort with risk.

• Fixed-rate mortgages work best for buyers who value stability and plan to stay long term.

• Adjustable-rate mortgages can be effective for buyers with short- to mid-term plans who want lower payments now.

The best approach is to review both options with real numbers tailored to your situation.

With LOVE,

Kristen Ambos