ARM vs Fixed Rate in Maryland
With Maryland's median home at $380,000 and conforming limit at $1,089,300, choosing between an ARM and a fixed-rate mortgage comes down to your time horizon and risk tolerance. D.C. suburbs have remained among the most resilient housing markets nationally, with steady demand from federal government workers. Baltimore city is significantly more affordable.
When an ARM May Make Sense in Maryland
- You plan to sell or refinance within 5-7 years
- You're buying in a high-cost Maryland market where even a small rate reduction meaningfully lowers payments
- Rates are at cyclical highs and expected to fall — ARM initial rates can be 0.5-1% lower than fixed
When Fixed Rates Win in Maryland
- You plan to stay long-term (10+ years)
- Payment certainty matters more than short-term savings
- Maryland's property taxes (1.09%, avg $3,633/year) add enough payment variability without adding rate risk
Closing Costs
Either product incurs similar closing costs (~$5,400 in Maryland). Frequent refinancing to escape an ARM adds these costs repeatedly.
Frequently Asked Questions
Is an ARM or fixed mortgage better in Maryland?
It depends on how long you plan to stay. Maryland's median home of $380,000 with a 5/1 ARM can save on initial payments, but fixed rates offer certainty — especially important given Maryland's property tax rate of 1.09% adds its own payment variability.
What are conforming loan limits for ARMs in Maryland?
ARMs and fixed-rate loans both have the same conforming limit in Maryland: $1,089,300. Montgomery and Howard counties qualify for the maximum high-cost conforming limit. Other Maryland counties are at $726,200.
How much can I save with an ARM in Maryland?
ARM initial rates are typically 0.5-1% below 30-year fixed rates. On a $304,000 loan (20% down on Maryland's median home), that's roughly $100-200/month in savings during the initial period.
What are closing costs for a mortgage in Maryland?
Maryland has some of the highest closing costs in the US. Transfer taxes are 0.5% at the state level plus local taxes (1.5% in Baltimore City). The state also imposes recordation taxes. Budget approximately $5,400 in total closing costs for either an ARM or fixed-rate mortgage in Maryland.