Which mortgage is right for you? A guide for today’s market

If you’re thinking about buying a home soon, it’s no secret that the current housing market poses a few unique challenges. Home prices remain high, inventory is tight, and mortgage rates continue to hover in a narrow but elevated range. That’s why choosing the right mortgage loan for your situation is more important than ever.

Mortgage demand from buyers remains historically low, with many would-be homeowners staying on the sidelines due to high prices and fluctuating interest rates. According to the Mortgage Bankers Association, the average rate for a 30-year fixed mortgage rose slightly to 6.88% in June, despite Treasury yields dipping somewhat due to global uncertainty and recent economic data (source: CNBC, Diana Olick, June 25, 2025).

In this kind of environment, understanding your mortgage options and how they align with your financial goals can give you a competitive edge and peace of mind.

Fixed-rate mortgages: Predictability you can count on
Fixed-rate mortgages offer long-term stability. Your interest rate and monthly principal and interest payment stay the same throughout the life of the loan, even if market rates change. This can be especially valuable in today’s uncertain environment, where rates are shifting within a narrow range but remain elevated compared to historic lows. A fixed-rate loan may be a suitable option if you plan to stay in your home for the long term and want predictable payments, regardless of market fluctuations.

Adjustable-Rate Mortgages (ARMs): Flexibility in the short term
Adjustable-rate mortgages begin with a lower initial rate, which adjusts after a set period based on market conditions. In a market where home prices are high and inventory is limited, ARMs can offer short-term savings that make homeownership more accessible, especially for buyers who plan to move or refinance in a few years. However, ARMs do carry the risk of rate increases in the future, so it is important to understand how your payments could change over time.

FHA Loans: Opening doors for first-time buyers
FHA loans are backed by the Federal Housing Administration and designed to help buyers with limited savings or credit history. They allow for down payments as low as 3.5% and offer more flexible qualification standards. In a market where affordability is a top concern, FHA loans can help buyers get into a home without needing to meet the stricter criteria of a conventional mortgage. Keep in mind that FHA loans require mortgage insurance premiums as part of your monthly payment.

VA Loans: A strong option for those who serve
For eligible veterans, active-duty military, and certain surviving spouses, VA loans* continue to offer one of the most powerful paths to homeownership. They often require no down payment, come with no private mortgage insurance, and offer competitive interest rates, even in today’s market.

Making the right choice in today’s market
The right mortgage is about more than just interest rates. It is about your personal goals, financial comfort, and timeline. So before you choose your mortgage ask yourself:

• Do you plan to stay in your home for many years?
• Are you looking for lower payments in the short term?
• Do you need a lower down payment option?
• Are you eligible for a VA loan?

Working with a mortgage broker can help you navigate these questions and determine which loan type best fits your situation. This is especially helpful in a market where rates and demand are holding steady but home prices remain elevated. Whether you’re a first-time buyer or preparing for your next move, we’re here to help you find a mortgage that suits your needs. https://www.primaryresidentialmortgage.com/