ARM vs. Fixed When You Might Leave the US in Five Years

Quick answer (updated October 2026): In the ARM vs fixed H-1B decision, the right choice depends on how long you will keep the loan, not how long you'll keep your visa. A 5/6, 7/6 or 10/6 ARM fixes the rate for 5, 7 or 10 years, then adjusts within caps. If you expect to sell or refinance before the fixed period ends, an ARM priced below the 30-year fixed can save real money.

Visa holders tend to think about mortgages in visa-length chunks. Your I-797 runs three years. The green card queue for India EB-2 is measured in decades. Maybe you'll move back to Bengaluru, maybe to Toronto, maybe nowhere. A 30-year fixed feels like a promise you can't keep.

But a mortgage isn't a 30-year promise. Most loans are paid off early through a sale or refinance. The real question is whether you're paying for rate protection you won't use. This guide covers how ARMs work, how lenders qualify you, the five-year math, and the worst case if you stay longer than planned.

How adjustable rate mortgages work in 2026

Today's conventional ARMs are indexed to SOFR and named by their fixed period and adjustment frequency:

• 5/6 ARM: Fixed for 5 years, then adjusts every 6 months.

• 7/6 ARM: Fixed for 7 years, then every 6 months.

• 10/6 ARM: Fixed for 10 years, then every 6 months.

After the fixed period, your rate becomes the index plus a margin set at closing, subject to caps.

ARM caps, in plain English

ARM	Typical caps (initial / periodic / lifetime)	First adjustment can rise up to	Lifetime maximum
5/6	2 / 1 / 5	Start rate + 2%	Start rate + 5%
7/6	5 / 1 / 5	Start rate + 5%	Start rate + 5%
10/6	5 / 1 / 5	Start rate + 5%	Start rate + 5%

These are the standard cap structures on agency SOFR ARMs, as of October 2026. Confirm the caps and margin on your Loan Estimate and ARM disclosure, since products vary.

How lenders qualify an adjustable rate mortgage on an H-1B

Visa holders get no special ARM rules. Fannie Mae's Selling Guide (B2-2-02) lets non-permanent residents borrow on the same terms as citizens. What changes is the qualifying rate, under Fannie Mae B3-6-04:

• Initial fixed period of 5 years or less (5/6): Qualify at the greater of the note rate plus 2% or the fully indexed rate.

• Initial fixed period longer than 5 years (7/6, 10/6): Generally qualify at the note rate, or the fully indexed rate if higher.

That makes the 5/6 harder to qualify for than the 7/6. Illustration only: on a $600,000 loan, a 5/6 ARM with a hypothetical 6.65% start rate is qualified as if it were 8.65%, a payment of about $4,677. That's higher than the 30-year fixed payment at 7.40% ($4,154). If your DTI is tight, a 7/6 may be the only ARM that fits.

Talk to a loan officer who's seen this before: ARM pricing relative to fixed changes week to week, and some weeks the spread isn't worth it. Tell us your price range and how long you expect to stay, and we'll price 5/6, 7/6, 10/6 and 30-year fixed side by side. Start at /contact.

ARM vs. fixed on an H-1B: the short horizon mortgage math

Here is the core comparison. Loan amount $600,000. The 30-year fixed uses the Freddie Mac weekly average of 7.40% for October 15, 2026 (illustration only, not a quote or offer). Freddie Mac's survey doesn't publish ARM averages, so the ARM start rates below are hypothetical spreads below the fixed rate to show how much the gap matters.

ARM start rate (hypothetical)	Monthly P&I	Monthly savings vs. fixed ($4,154)	Payment savings over 5 years	Extra principal paid down by year 5
6.90% (0.50% below)	$3,952	$203	$12,161	$2,956
6.65% (0.75% below)	$3,852	$302	$18,149	$4,513
6.40% (1.00% below)	$3,753	$401	$24,075	$6,122

Two takeaways. First, the gap drives everything. A half-point spread saves about $12,000 over five years, a full point about $24,000. Second, ARMs pay down slightly more principal early, because a lower rate means less of each payment goes to interest.

Before choosing, compare the ARM's closing costs and points with the fixed loan's. A lower start rate bought with extra points can wipe out the savings on a short hold.

The worst case: you stay longer than five years

Plans change. The PERM case stalls, you get married, the kids start school in Frisco ISD. Here's what happens on a 5/6 ARM if rates rise as far as the caps allow at month 61, recalculated on the remaining balance over 25 years.

Start rate (hypothetical)	Balance at month 60	Payment if rate hits start + 2%	Payment at lifetime cap (start + 5%)
6.90%	$564,182	$4,696	$5,900
6.65%	$562,625	$4,587	$5,781
6.40%	$561,015	$4,480	$5,662

The first adjustment could push your payment roughly $330 to $540 above what the fixed loan would have cost, and the lifetime cap is much higher. This is a worst case. The real rate depends on SOFR at the time plus your margin, and it could go down. But you should be able to absorb this payment, or have a clear refinance or sale plan, before taking a 5/6.

Ask yourself these four questions

1. Would I be comfortable with the cap payment for a year while I sell or refinance?

2. Do I have reserves beyond the down payment? Visa holders face unique job-loss timing risk. See what to do if you're laid off on an H-1B with a mortgage.

3. Would I rent the home out rather than sell if I leave? Then your horizon may be longer than your stay. Read what happens to your mortgage if you leave the US.

4. Could I qualify to refinance later? Refinancing requires income and credit at that time, and visa holders may face overlays again.

5/6 ARM vs. 7/6 vs. fixed for visa holders: matching product to plan

Your realistic plan	Product that often fits	Why
Likely to sell within 4–5 years	5/6 ARM (if DTI allows)	Biggest start-rate discount, fixed through your hold
Unsure, 5–8 years	7/6 ARM	Longer fixed period, qualifies at note rate
Might rent it out after leaving	10/6 ARM or 30-year fixed	Long horizon as a landlord
Planning to stay, green card in process	30-year fixed	Rate certainty; refinance if rates drop
Debt-averse, high income	15-year fixed	Compare in our 15-year vs. 30-year guide

If you're weighing whether to buy at all before your green card, our buy now or wait for the green card guide covers that decision. This post assumes you've decided to buy.

What the rules actually say

• Fannie Mae Selling Guide B2-2-02 (07/28/2015): Non-permanent residents eligible on the same terms as citizens. No ARM-specific visa restriction.

• Fannie Mae Selling Guide B3-6-04 (02/07/2024): ARMs with initial fixed periods of five years or less qualify at the greater of note rate plus 2% or the fully indexed rate; longer fixed periods generally qualify at the note rate (or fully indexed rate if higher).

• Agency SOFR ARM cap structures: 5/6 ARMs typically 2/1/5; 7/6 and 10/6 typically 5/1/5, as of October 2026. Lender products vary.

• Freddie Mac PMMS, week of Oct 15, 2026: 30-year fixed 7.40% (illustration only, not a quote or offer).

Frequently Asked Questions

Q: Can H-1B holders get an adjustable rate mortgage?
A: Yes. Conventional ARMs follow the same eligibility rules as fixed loans, and Fannie Mae treats non-permanent residents the same as citizens. Some lenders add their own visa overlays, so availability differs between lenders, not between ARM and fixed.

Q: Is a 5/6 ARM a good idea if I might leave the US?
A: It can be, if you expect to sell or refinance within five years and the start rate is meaningfully below the fixed rate. Check that you can handle the first-adjustment payment if plans change. A 7/6 is a common compromise.

Q: Why is a 5/6 ARM harder to qualify for than a fixed loan?
A: Fannie Mae qualifies ARMs with fixed periods of five years or less at the note rate plus 2% (or the fully indexed rate if higher). That inflated payment goes into your DTI. A 7/6 or 10/6 generally qualifies at the note rate.

Q: What happens to my ARM if I move abroad and keep the house?
A: The loan continues as written. Your rate adjusts per your note after the fixed period. You'd need to keep paying, ideally from rental income. Leaving the country doesn't trigger a payoff on its own, but moving out changes the occupancy picture, so plan ahead.

Q: Can I refinance an ARM into a fixed rate later?
A: Yes, if you qualify at the time: income, credit, equity and a lender willing to accept your residency status. Don't count on a refinance being available at a specific rate or moment.

Get your ARM vs. fixed numbers at today's pricing

Five years of payments can differ by more than $20,000 depending on the spread, so it's worth pricing properly. We'll run a rate-and-payment scenario at today's pricing across our 150+ wholesale lenders, comparing 5/6, 7/6, 10/6 and 30-year fixed on your loan amount, including worst-case adjustment payments and break-even on points. Have your target price, down payment, and a rough sense of your time horizon ready. Book a free 15-minute call at /contact, start your application at /apply, or call 713-366-4668.

Masala Loans is a brand of Matador Lending, LLC (NMLS #2072896). Written by Apurva Sanghavi, President, NMLS #227127. Equal Housing Opportunity. This article is general education, not tax, legal or immigration advice — consult a qualified CPA, attorney or immigration lawyer for your situation. Program availability, rates and terms vary by lender and borrower and are subject to change; not a commitment to lend.