ARM vs Fixed Rate in Washington
With Washington's median home at $530,000 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. Seattle metro has moderated from its 2022 peak but remains among the nation's most expensive markets. Eastern Washington (Spokane, Tri-Cities) offers far more affordable pricing and has attracted remote workers.
When an ARM May Make Sense in Washington
- You plan to sell or refinance within 5-7 years
- You're buying in a high-cost Washington 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 Washington
- You plan to stay long-term (10+ years)
- Payment certainty matters more than short-term savings
- Washington's property taxes (0.87%, avg $4,061/year) add enough payment variability without adding rate risk
Closing Costs
Either product incurs similar closing costs (~$3,300 in Washington). Frequent refinancing to escape an ARM adds these costs repeatedly.
Frequently Asked Questions
Is an ARM or fixed mortgage better in Washington?
It depends on how long you plan to stay. Washington's median home of $530,000 with a 5/1 ARM can save on initial payments, but fixed rates offer certainty — especially important given Washington's property tax rate of 0.87% adds its own payment variability.
What are conforming loan limits for ARMs in Washington?
ARMs and fixed-rate loans both have the same conforming limit in Washington: $1,089,300. King County qualifies for high-cost limits. Most other Washington counties are at the standard limit.
How much can I save with an ARM in Washington?
ARM initial rates are typically 0.5-1% below 30-year fixed rates. On a $424,000 loan (20% down on Washington's median home), that's roughly $100-200/month in savings during the initial period.
What are closing costs for a mortgage in Washington?
Washington charges a Real Estate Excise Tax (REET) ranging from 1.1% to 3% of sale price (progressive based on value). This is among the higher transfer tax structures nationally for luxury-priced homes. Budget approximately $3,300 in total closing costs for either an ARM or fixed-rate mortgage in Washington.