Fixed-Rate vs Adjustable-Rate Mortgages — How ARM and Fixed Loans Compare in 2026
Choosing between a fixed-rate and adjustable-rate mortgage (ARM) is one of the most consequential decisions in the home buying process, and in 2026's interest rate environment — with the 30-year fixed at 5.98% and the Fed funds rate at 3.64% after a sustained cutting cycle — the tradeoffs between these two loan structures deserve careful analysis. A fixed-rate mortgage offers the certainty of unchanging monthly payments for the full loan term, while an ARM starts with a lower introductory rate that adjusts after a set period. Neither is universally better; the right choice depends on how long you plan to stay in the home, your risk tolerance, and your financial flexibility. This guide breaks down exactly how each works, what they cost, and when each makes the most sense.