2026 Adjustable-Rate Mortgage Guide AZ | Roadrunner
While fixed-rate mortgages are the most common choice, an Adjustable-Rate Mortgage (ARM) can be a strategic financial tool for the right borrower. An ARM is a loan with an interest rate that can change over time, and understanding how they work is key to determining if one is right for you.
How an ARM Works
An ARM has an initial period where the interest rate is fixed, typically for 5, 7, or 10 years. During this time, the rate is often lower than what you would get with a traditional 30-year fixed loan. After this initial period, the rate will adjust based on market conditions, (e.g., once per year). These adjustments are typically capped to protect you from extreme changes.
Who is an ARM Good For?
An ARM can be a powerful option for specific types of homebuyers:
- Buyers who plan to sell before the fixed period ends: If you know you will be moving within 5-7 years, you can take advantage of the lower initial rate and sell the home before the first rate adjustment ever occurs.
- Homebuyers who expect their income to increase: A borrower who is early in their career and anticipates significant income growth may be comfortable with the potential for a higher payment in the future.
- Buyers in a high interest rate environment: When fixed rates are high, an ARM can provide a more affordable entry point into homeownership, with the option to refinance into a fixed-rate loan later if rates come down.
The Bottom Line
An ARM is not for everyone, but for a well-informed borrower in the right situation, it can be a very smart financial move. A consultation can help you weigh the risks and rewards to see if an ARM aligns with your long-term financial plan.
To find out if this or any other loan program is right for you, schedule a consultation with me, Jonathan Moses, or begin your secure pre-approval.
Jonathan Moses
Senior Loan Officer | NMLS #2064741
This guide was prepared by Jonathan Moses (NMLS #2064741), the senior loan officer and founder of Roadrunner AZ Lending. With years of experience in the Phoenix and Scottsdale markets, Jonathan is dedicated to providing expert, transparent advice. Learn more about Jonathan.