While the 30-year fixed-rate mortgage recently dipped below 6%, adjustable-rate mortgages are offering homebuyers their biggest discount in nearly four years.

The average homebuyer would save $150 per month by using an ARM instead of a 30-year fixed-rate mortgage, according to a new report from Redfin that analyzed 30-year rates compared with 7/6 ARMs as of March 16. That's a 5.8% discount, the largest since June 2022 in dollar and percentage terms.

The typical homebuyer in March using an ARM received a 5.51% rate, while a fixed mortgage offered a 6.19% rate on average, the report found.

"Adjustable-rate mortgages are offering meaningful savings in 2026's expensive housing market," said Bill Banfield, chief business officer at Rocket, in a press release Thursday. "Even though housing costs have recently come down a bit, it remains tough for first-time buyers to break in, and for existing homeowners to walk away from their ultra-low rates."

Home-price growth leveled off at the end of last year, although varied from region to region across the country, according to the Federal Housing Finance Agency House Price Index.

The typical monthly payment for a borrower using an ARM was $2,578, down 7.4% from a year ago. That was also 5% less than the $2,727 monthly average for fixed-rate borrowers.

The 30-year rate is lower than it has been the past couple years, but the Iran war has pushed rates back above 6%. The 30-year rate has climbed 22 basis points over the last two weeks, according to Freddie Mac, encouraging buyers to look at ARMS. 

The average rate for an ARM, 5.51%, has dropped 87 basis points from 6.38% a year ago, while the 30-year rate is down 45 basis points on an annual basis.

As a result, the ARM share of mortgage application activity has increased nearly 20 basis points since the start of the year, but fell eight basis points from last week, according to the Mortgage Bankers Association.

ARMs also are not as risky as they used to be, as they now have interest-rate caps, which limit how much the rate can increase each term and over the life of the loan. The typical mortgage lasts between four and seven years as well, according to the National Mortgage Database, so a borrower who chooses an ARM with a seven- or 10-year fixed-rate period never gets to the adjustable-rate point, the Redfin report said.