ARM vs Fixed Rate in Virginia
With Virginia's median home at $365,000 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. Northern Virginia (Fairfax, Loudoun, Arlington, Alexandria) carries among the highest median prices on the East Coast. Richmond and Hampton Roads are significantly more affordable. Rural Southwestern Virginia is very low cost.
When an ARM May Make Sense in Virginia
- You plan to sell or refinance within 5-7 years
- You're buying in a high-cost Virginia 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 Virginia
- You plan to stay long-term (10+ years)
- Payment certainty matters more than short-term savings
- Virginia's property taxes (0.82%, avg $2,972/year) add enough payment variability without adding rate risk
Closing Costs
Either product incurs similar closing costs (~$3,900 in Virginia). Frequent refinancing to escape an ARM adds these costs repeatedly.
Frequently Asked Questions
Is an ARM or fixed mortgage better in Virginia?
It depends on how long you plan to stay. Virginia's median home of $365,000 with a 5/1 ARM can save on initial payments, but fixed rates offer certainty — especially important given Virginia's property tax rate of 0.82% adds its own payment variability.
What are conforming loan limits for ARMs in Virginia?
ARMs and fixed-rate loans both have the same conforming limit in Virginia: $1,089,300. Northern Virginia counties — Arlington, Fairfax, Loudoun — and the City of Alexandria qualify for high-cost conforming limits of $1,089,300.
How much can I save with an ARM in Virginia?
ARM initial rates are typically 0.5-1% below 30-year fixed rates. On a $292,000 loan (20% down on Virginia's median home), that's roughly $100-200/month in savings during the initial period.
What are closing costs for a mortgage in Virginia?
Virginia charges a Grantor's Tax of $0.50/$500 of sale price plus a state recordation tax. Localities may add additional recordation taxes. Northern Virginia and the Northern Virginia Transportation Authority also add levies on real property transactions. Budget approximately $3,900 in total closing costs for either an ARM or fixed-rate mortgage in Virginia.