Market Stats
ARM vs. Fixed Rate Mortgage: Which Is Better Right Now?
By David Golovin · September 22, 2026 · 2 min read
Adjustable-rate mortgages are back in the news. But the spread between ARMs and fixed rates right now is smaller than most buyers expect.
Source: Freddie Mac Primary Mortgage Market Survey
| 5/1 ARM | 30-yr Fixed | Assumable | |
|---|---|---|---|
| Current rate (est.) | 7.06% | 6.95% | avg est. 4.83% |
| Rate risk | Adjusts after 5 yrs | None | None |
| Monthly payment ($400k) | ~$2,678 | ~$2,637 | ~$2,100 est. |
| Savings vs fixed | About $40/mo | -- | Over $500/mo est. |
Why the ARM discount is so thin
The 5/1 ARM averages 7.06% vs 6.95% for a 30-year fixed per Freddie Mac. That is less than 0.15 percentage points - historically ARMs discount fixed rates by 1 point or more.
The risk that does not go away
An ARM resets after the fixed period. If rates stay high, your adjusted payment could exceed what you locked in. Most buyers choosing ARMs today plan to sell or refinance within 5 years.
What some buyers do instead
Some buyers skip the ARM question by finding a home with an assumable FHA or VA loan. Estimated average assumable rates on active listings on Roots are well below current market rates.
FAQ
Should I get an ARM or fixed rate mortgage right now?
With a 5/1 ARM at 7.06% and the 30-year fixed at 6.95%, the spread is under 0.15 percentage points. Historically ARMs make sense when the discount is 1% or more. The math currently does not strongly favor ARMs.
What is the risk of an adjustable rate mortgage?
An ARM resets after the fixed period. If rates stay elevated or rise further, your payment increases when the loan adjusts. Most buyers choosing ARMs today plan to sell or refinance before the first adjustment.
Can I get a lower rate than 7 percent right now?
Yes. Buyers can pay discount points to buy down the rate, and FHA and VA loans typically price below conventional. Assumable mortgages can go further: the buyer takes over the seller existing loan, with estimated rates on active listings well below current market rates.