ARM vs Fixed Rate in New York
With New York'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. NYC metro remains among the world's most expensive. The suburbs — Long Island, Westchester, and Hudson Valley — saw dramatic appreciation 2020-2022. Upstate NY (Buffalo, Rochester, Albany) offers affordable housing nationally.
When an ARM May Make Sense in New York
- You plan to sell or refinance within 5-7 years
- You're buying in a high-cost New York 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 New York
- You plan to stay long-term (10+ years)
- Payment certainty matters more than short-term savings
- New York's property taxes (1.40%, avg $5,884/year) add enough payment variability without adding rate risk
Closing Costs
Either product incurs similar closing costs (~$6,800 in New York). Frequent refinancing to escape an ARM adds these costs repeatedly.
Frequently Asked Questions
Is an ARM or fixed mortgage better in New York?
It depends on how long you plan to stay. New York's median home of $380,000 with a 5/1 ARM can save on initial payments, but fixed rates offer certainty — especially important given New York's property tax rate of 1.40% adds its own payment variability.
What are conforming loan limits for ARMs in New York?
ARMs and fixed-rate loans both have the same conforming limit in New York: $1,089,300. New York City's five boroughs, Nassau, Suffolk, Putnam, Rockland, and Westchester counties qualify for high-cost limits up to $1,089,300.
How much can I save with an ARM in New York?
ARM initial rates are typically 0.5-1% below 30-year fixed rates. On a $304,000 loan (20% down on New York's median home), that's roughly $100-200/month in savings during the initial period.
What are closing costs for a mortgage in New York?
New York charges a mansion tax (1-3.9% depending on price), a mortgage recording tax (1.05-2.175% of mortgage), and a transfer tax (0.4-0.65% of sale price). NYC buyers also pay city-specific taxes, making total closing costs among the nation's highest. Budget approximately $6,800 in total closing costs for either an ARM or fixed-rate mortgage in New York.