Understanding Mortgage Options: Fixed vs. Adjustable Rates
Updated: 3 days ago
Choosing a mortgage matters as much as choosing the house. The rate and terms decide what you pay every month and over the life of the loan. As a military spouse for more than 30 years and an Arlington Associate Broker with 560+ transactions, I've seen a good loan choice save families real money, especially when orders come early. Here's how to compare your options.
This article is general information, not tax, legal or financial advice.
What sets your rate
Mortgage rates move with the economy, inflation and the bond market. Your own rate also depends on your credit, down payment, loan type and the points you pay. VA loans often have competitive rates, but lenders price them differently, so compare.
Fixed-rate mortgages
Your rate stays the same for the whole loan, usually 15 or 30 years.
Pros: a predictable payment and protection if rates rise.
Cons: the starting rate is often higher than an ARM's. If rates drop, you'd need to refinance to benefit. My refinancing guide explains when that pays off.
Adjustable-rate mortgages (ARMs)
An ARM has a fixed rate for a set period, often 5, 7 or 10 years. After that, it adjusts on a schedule based on a market index. VA-backed ARMs are available too.
Pros: a lower starting rate, which can help if you expect to sell or refinance before the first adjustment.
Cons: your payment can rise after the fixed period, sometimes by a lot.
Know the caps. ARMs limit how much the rate can change at the first adjustment, at each later adjustment and over the life of the loan. Ask your lender for all three, and what your highest possible payment would be.
For military families, an ARM can make sense if you're confident you'll move before it adjusts. But orders change, and you might keep the home as a rental. Plan for the worst-case payment.
How to get the best deal
1. Check your credit first. My 90-day credit plan shows how.
2. Know prequalification from preapproval. Prequalification is a quick estimate. Preapproval is based on documents the lender has checked, and it's what sellers want to see.
3. Get Loan Estimates from at least two or three lenders on the same day, for the same loan type. Compare the rate, points, lender fees and cash to close.
4. Compare APRs carefully. The APR includes the rate plus points and fees, so it's usually higher than the rate. The CFPB cautions against comparing APRs alone, especially between fixed and adjustable loans.
5. Shop within a few weeks. Multiple mortgage credit checks in a short window count about the same as one.
6. Lock your rate once you have a contract, and ask how long the lock lasts.
7. Review your Closing Disclosure. You'll get it at least three business days before closing. Compare it to your Loan Estimate and ask about any changes.
The CFPB's Owning a Home tools help you compare offers.
In Northern Virginia
Many Northern Virginia loans are large, so the gap between two offers can be hundreds of dollars a month. If rates are high, ask whether the home has an assumable VA loan. My VA loan assumptions guide explains how that works, and my Northern Virginia PCS guide covers the rest of the move.
Sources: CFPB, APR vs. interest rate; CFPB, ARM rate caps; CFPB, credit inquiries; CFPB, Closing Disclosure.
Last reviewed: October 2026
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