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Fixed vs. adjustable rate

By Samprit Biswas, editor · Updated October 8, 2026

A fixed-rate mortgage keeps one rate for the life of the loan. An adjustable-rate mortgage (ARM) keeps its rate for a first stretch of years, then resets it on a schedule, to a published index plus the lender's margin. Below, today's rate and annual percentage rate (APR) for each.

Two loans over the same years
  • A 30-year fixed loan: one rate for all 30 years
  • A 5/6 adjustable-rate loan: fixed for 5 years, then reset every 6 months
  • 30-year fixed: 7.31% rate, 7.43% APR
  • 5/6 adjustable-rate: 5.41% rate, 6.50% APR

An adjustable rate's APR assumes the rate resets to the fully indexed rate after the fixed years, so it sits about 1.09 percentage points above the starting rate.

The least certain of our estimates: its benchmark follows only 0.064 of each move in the 10-year Treasury yield, so it changes mostly once a week.

Estimate, not an offer · purchase, typical borrower · FFIEC, week of Oct 5, 2026 · Fannie Mae, dated Sep 30, 2026 · U.S. Treasury, Oct 7, 2026

Sources and licences
Average prime offer rates (FFIEC)

Average prime offer rates published by the FFIEC for the Consumer Financial Protection Bureau; a U.S. government work in the public domain.

Loan-level price adjustments (Fannie Mae)

Borrower adjustments derived from Fannie Mae's Loan-Level Price Adjustment Matrix dated September 30, 2026. Fannie Mae does not endorse these estimates.

Daily Treasury par yield curve (U.S. Treasury)

10-year par yield from the U.S. Department of the Treasury's daily par yield curve rates.

Why an adjustable rate starts lower

A lender takes less risk on a rate it promises for a few years than on one it promises for decades, so the starting rate is usually lower. After the fixed years, you carry the risk: the rate can rise or fall at each reset, within caps the loan sets.

Reading an adjustable rate's APR

Its APR assumes the rate resets after the fixed years to today's index plus the margin. That is why it sits far above the starting rate, and why it, not the starting rate, is the number to compare with a fixed loan's.

When each fits

A fixed rate suits someone who wants a payment that never changes, or expects to stay for many years. An adjustable rate can suit someone who expects to sell or refinance before the first reset, and could afford the payment if rates rose.

See the 5/6 ARM's rates

How to cite this page

InfinityRateWatch. "Fixed vs. adjustable rate." https://infinityratewatch.com/learn/fixed-vs-adjustable-rate/. Data as of Oct 8, 2026.