🔒 What Is a Fixed-Rate Mortgage?

A fixed-rate mortgage keeps the same interest rate for the entire life of the loan—typically 15, 20, or 30 years.
That means your monthly principal and interest payment never change, even if market rates rise or fall.

Pros:

• Predictable monthly payments (great for budgeting)

• Protection against rising interest rates

• Simplicity—no surprises down the road

Cons:

• Slightly higher initial interest rate than an ARM

• You might miss out on savings if market rates drop significantly

Best for:
Homebuyers planning to stay in their home long term or anyone who values stability and peace of mind.

🔁 What Is an Adjustable-Rate Mortgage (ARM)?

An ARM can have a lower rate that is a fixed introductory rate—usually for 3, 5, 7, or 10 years—then can adjust, each year after (depending on the market).

Pros:

• Can have lower initial interest rate = lower early payments

• Great option if you plan to move or refinance before the rate adjusts

• Can save thousands during the initial fixed period

Cons:

• Payments may increase after the adjustment period

• Harder to budget long-term if rates rise

• Less peace of mind compared to a fixed loan

• If you do want to refinance you HAVE to re-qualify for the new loan. If life events have happened (such as going to a lower fixed income, going to a variable income job vs a W2 salary, job loss, etc) then you may not be able to refinance to a fixed (more secure) rate. 

ARMs are Best for:
Buyers who expect to sell, move, or refinance within a few years—or those comfortable managing rate changes strategically and don’t mind a “gamble” on the mortgage rate market. 

💡 Real-Life Example

Let’s say you’re buying a $350,000 home in Wisconsin.

• 30-Year Fixed Rate: 6.75% → Monthly payment ≈ $2,270

• 7/1 ARM (starts at 6.00%) → Monthly payment ≈ $2,098

That’s a savings of about $172/month for the first seven years—over $14,000 saved before any rate change occurs.
If you know you’ll move or refinance before that time, the ARM could make perfect sense.

But if this is your forever home and you want peace of mind, a fixed-rate loan may be worth the extra stability.

How to Decide

Ask yourself these key questions:

1. How long do I plan to stay in this home?

2. Can my budget handle a potential rate increase later?

3. Am I comfortable tracking the market—or do I prefer predictability?

There’s no one-size-fits-all answer. The best loan is the one that fits your financial goals and timeline.

Final Thoughts

Whether you choose a fixed-rate or adjustable-rate mortgage, understanding your options is the first step to confident homeownership.
As your trusted local lender, I’ll help you compare scenarios side by side so you can see exactly how each loan impacts your long-term goals.

Ready to explore your options?
Let’s chat about what fits your lifestyle and budget best.

—
Kristen Ambos
Mortgage & Real Estate Professional

Point Mortgage
📍 Serving Wisconsin homebuyers with experience, heart, and honest guidance