How a 10/1 or 10/6 ARM vs. 30-year fixed mortgage works
A fixed-rate mortgage has the same interest rate for the life of the loan. For an adjustable-rate mortgage, you’ll typically see them presented as two numbers. The first number in an ARM represents how long the interest rate will be fixed, while the second number represents how frequently the interest rate will change after the fixed-rate period ends.
10/1 ARM
A 10/1 ARM has a fixed interest rate for the first 10 years. After the first 10 years, the interest rate will become a variable rate, meaning it will change annually based on market conditions. Since a 10/1 ARM typically has a 30-year loan term, that means your interest rate will change every year for 20 years after the first 10 years are up.
10/6 ARM
A 10/6 ARM will also have a fixed interest rate for the first 10 years, after which the interest rate can go up or down every six months. A 10/6 ARM also generally has a 30-year term, so the interest rate will change every six months for 20 years after the fixed-rate period.
30-year fixed-rate mortgage
For a 30-year fixed-rate mortgage, you’ll have the same interest rate and the same monthly payment for 30 years.
» MORE: ARM vs. fixed-rate mortgage
Pros and cons of a 10/1 or 10/6 ARM
Before deciding on a 10/1 or 10/6 ARM, there are a few advantages and disadvantages to consider.
Pros
- Lower initial interest rate than fixed-rate mortgages
- Lower monthly mortgage payments during the first 10 years
- Good for people who plan to sell or refinance before the fixed-rate period ends
Cons
- Interest rate will likely increase after the first 10 years
- Unpredictable monthly payments after the first 10 years
- Potential for prepayment penalties if you sell or refinance too early
Pros and cons of a 30-year fixed mortgage
Consider the pros and cons of 30-year fixed-rate mortgages, and compare them to 10/1 and 10/6 ARMs to see which option might be better for you.
Pros
- Same interest rate for the life of the loan
- Predictable and stable monthly payments
- Good for people who want to minimize risk
Cons
- Typically a higher interest rate than ARMs
- Could be stuck with a higher rate if interest rates drop
Comparison: 10/1 or 10/6 ARM vs. 30-year fixed mortgage
Adjustable-rate and fixed-rate mortgages are generally the same during the ARM’s fixed-rate period. For 10/1 and 10/6 ARMs, the fixed-rate period is the first 10 years.
"For the first 10 years, either of these options is identical to a 30-year fixed," said Melissa Cohn, regional vice president at William Raveis Mortgage. "Only at the end of the 10 years can the rate adjust and be subject to an increase based on where the index [...] is at the time."
The table below compares 10/1 ARMs with 10/6 ARMs and 30-year fixed-rate mortgages.
| Factor | 10/1 ARM | 10/6 ARM | 30-year fixed-rate mortgage |
|---|---|---|---|
| Loan term | 30 years | 30 years | 30 years |
| Interest rate | Fixed for 10 years, then changes every year | Fixed for 10 years, then changes every 6 months | Fixed for 30 years |
| Monthly payment | Unpredictable after 10 years | Unpredictable after 10 years | Predictable for life of the loan |
| Risk level | High risk | High risk | Low risk |
| Best for | Borrowers who want to sell or refinance within the first 10 years | Borrowers who want to sell or refinance within the first 10 years | Borrowers who plan to stay in a home long term |
Should you get an ARM or a fixed-rate mortgage?
Whether a 10/1 ARM, 10/6 ARM or a 30-year fixed-rate mortgage is best for you depends on several factors.
Interest rates
Homebuyers who want to save on interest rates may prefer an ARM because they typically have a lower starting interest rate than a fixed-rate mortgage.
However, because interest rates are dependent on the current market, and because you can't predict what interest rates will be when your fixed-rate period ends, you’ll risk paying a higher interest rate on your mortgage later on.
"If we are in another inflationary time period, it is very possible that the rate on the adjustables will increase at the end of the 10 years, but it is also just as possible that the rate could be lower," Melissa Cohn said. "It is impossible to predict where rates and the economy will be in 10 years."
Risk level and goals
You need to know your risk level and what your short- and long-term goals are for the home. If you prefer stability and consistency and knowing that your mortgage payment will remain the same throughout the duration of the loan, a 30-year fixed-rate mortgage is likely a better choice.
With a 30-year fixed, there is no rate risk — the rate can never change over the life of the loan. ”
"With a 30-year fixed, there is no rate risk — the rate can never change over the life of the loan," Cohn said.
But if market rates go down in the future, a fixed-rate mortgage will keep the same rate. If you buy a home when interest rates are currently high, you’ll be stuck with a high rate for 30 years unless you refinance.
Planning to sell or refinance
If you plan to sell or refinance before the fixed-rate period ends, a 10/1 or 10/6 ARM might be a good option for you.
A 10/1 or 10/6 ARM can be a good option if you plan to sell or refinance within 10 years.
"If you think you will sell or refinance within the 10 years, there is no real risk — it is just in year 11 that the risks can happen," Cohn said.
However, you also need to consider your future income if you plan to refinance.
"If your income changes, you may no longer qualify and be subject to the potential for a higher rate and payment in 11 years," Cohn said.
» COMPARE: Best mortgage lenders
FAQ
Can you refinance a 10/1 or 10/6 ARM into a 30-year fixed-rate mortgage?
Yes, it's possible to refinance a 10/1 or 10/6 ARM into a fixed-rate mortgage. Make sure to consider refinancing costs, such as closing costs. You’ll also typically need at least 20% equity in your home, a low debt-to-income (DTI) ratio and stable income.
Is it better to have an ARM or a fixed interest rate?
Whether it’s better to have an ARM or a fixed-interest-rate mortgage depends on factors like how long you plan to stay in a home, your risk tolerance and your short- and long-term financial goals. If you don’t plan to stay in a home long term, an ARM may help you to secure a lower interest rate. If you do plan to stay in your home long term, a fixed-rate mortgage is typically better since it provides predictable and stable monthly payments, allowing you to better manage your money.
What is the downside of an ARM?
The main downside of an ARM is that your monthly payments are unpredictable after the fixed-rate period. For a 10/1 ARM, that means your monthly payments could increase significantly every year for the rest of the loan term after the fixed-rate period ends. For 10/6 ARMs, your monthly payments will change every six months for the remaining term after the first 10 years. Because of this, an ARM could end up costing a lot more than a 30-year fixed mortgage.
Bottom line
Before deciding on a mortgage, consider your financial situation, risk level and future goals. If you plan to live in a property long term, a fixed-rate mortgage will likely be the best choice. If you think you’ll sell or refinance your home within five or 10 years, an ARM may help you secure a lower initial interest rate.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Consumer Finance Protection Bureau, “What Is the Difference Between a Fixed-Rate and Adjustable-Rate Mortgage (ARM) Loan?" Accessed Feb. 6, 2026.
