Hey St. George! Rates are still sitting above 7%, and we're getting one question a lot more lately: "Should I look at an adjustable-rate mortgage?"
You're not the only one asking. Here's what the data shows, how an ARM actually works, and when we'd say go for it or skip it.
Here's What We're Seeing
- Fixed rates are still high. Freddie Mac's weekly survey had the 30-year fixed at 7.24% as of Oct. 29, 2026. A year ago it was 6.17%.
- ARMs are cheaper up front. In the Mortgage Bankers Association's survey released Nov. 4, 2026, the average 5/1 ARM rate was 6.29%, compared with 7.3% for a 30-year fixed.
- More buyers are choosing them. ARMs made up 11.4% of all mortgage applications that week. MBA's chief economist said that's the highest share since September 2025.
- Daily rates tell the same story. Mortgage News Daily's index had the 30-year fixed at 7.30% and the 7/6 SOFR ARM at 6.71% on Nov. 3, 2026.
What That Gap Means for Your Payment
Here's some simple math. On a $400,000 loan, principal and interest at 7.3% runs about $2,742 a month. At 6.29%, it's about $2,473.
That's roughly $269 a month, before taxes and insurance. It's not nothing! But it's only part of the story.
How an ARM Actually Works
An ARM starts with a fixed rate for a set number of years. On a 5/1, that's five years. After that, the rate adjusts.
According to the Consumer Financial Protection Bureau, your new rate is the index plus the margin, subject to any rate caps. The index moves with the market. The margin is set by your lender and doesn't change after closing.
Translation: when the fixed period ends, your rate depends on where the market is then. It could go down. It could also go up.
The CFPB also says margins can vary a lot between lenders, and you can negotiate them. Shop that number, not just the starting rate.
When an ARM Can Make Sense
- You expect to move or sell within the fixed period. A job change, a growing family, or a plan to upsize later.
- You can handle a higher payment if the rate adjusts up, without it wrecking your budget.
- You understand the caps. You know how much the rate can rise at the first adjustment, each year after, and over the life of the loan.
When We'd Say Stick With Fixed
- This is your forever home, or close to it.
- Your budget is already tight at the starting payment.
- You're counting on refinancing later. Nobody knows where rates will be in five years. We don't plan around a guess.
Our Take
An ARM isn't good or bad. It's a tool. For the right buyer with the right timeline, it can lower the payment and make a home work today.
Our suggestion would be to get quotes on both a fixed loan and an ARM from the same lender, then compare the payment, the points and the caps side by side. We'll help you think it through and connect you with lenders we trust. If you want more context on why rates haven't dropped, read our post on what the Fed's October decision meant for mortgage rates.
Bottom line, the best loan is the one that fits your plans, not just the lowest rate on the screen. Thinking about buying this winter? Reach out to us here. We're here to help.
Sources
- Freddie Mac, Primary Mortgage Market Survey, rates as of Oct. 29, 2026: https://www.freddiemac.com/pmms
- Mortgage Bankers Association, "Mortgage Applications Decrease in Latest MBA Weekly Survey," Nov. 4, 2026 (week ending Oct. 30): https://newslink.mba.org/mba-newslinks/2026/november/mba-newslink-wednesday-nov-4-2026/mortgage-applications-decrease-in-latest-mba-weekly-survey/
- Mortgage News Daily, Mortgage Rates Daily Index, as of Nov. 3, 2026: https://www.mortgagenewsdaily.com/mortgage-rates
- Consumer Financial Protection Bureau, "For an adjustable-rate mortgage (ARM), what are the index and margin, and how do they work?" (last reviewed Apr. 3, 2024): https://www.consumerfinance.gov/ask-cfpb/for-an-adjustable-rate-mortgage-arm-what-are-the-index-and-margin-and-how-do-they-work-en-1949/
- Payment estimates are our own math: 30-year amortization on a $400,000 loan, principal and interest only, using the MBA rates above.
The Genuine Group | Brokered by Red Rock Real Estate
