If you’ve been house hunting in Thousand Oaks, Westlake Village, Agoura Hills, or Simi Valley, you’ve probably felt the sting of today’s mortgage rates. With home prices rising across the Conejo Valley real estate market, more buyers are exploring loan options that help make monthly payments more manageable. One option gaining traction? Adjustable-rate mortgages (ARMs).

If you remember the crash in 2008, this may bring up some concerns. But don’t worry. Today’s ARMs aren’t the same. Here’s why.

Back then, some buyers were given loans they couldn’t afford after the rates adjusted. But now, lenders are more cautious, and they evaluate whether you could still afford the loan if your rate increases. So, don’t assume the return of ARMs means another crash. Right now, it just shows some buyers are looking for creative solutions when affordability is tough.

According to recent data from the Mortgage Bankers Association (MBA), more people are choosing ARMs to better navigate today’s market (see graph below).

And while ARMs aren’t right for everyone, in certain situations they do have their benefits.

How an Adjustable-Rate Mortgage Works

Here’s how Business Insider explains the main difference between a fixed-rate mortgage and an adjustable-rate mortgage:

“With a fixed-rate mortgage, your interest rate remains the same for the entire time you have the loan. This keeps your monthly payment the same for years . . . adjustable-rate mortgages work differently. You'll start off with the same rate for a few years, but after that, your rate can change periodically. This means that if average rates have gone up, your mortgage payment will increase. If they've gone down, your payment will decrease.”

For buyers looking to move into popular Conejo Valley neighborhoods like Newbury Park or Oak Park, that lower initial rate could be the key to buying a home sooner.

Pros and Cons of an ARM

Here’s a little more information on why some buyers are giving ARMs another look. They offer some pretty appealing upsides, like a lower initial rate. As Business Insider explains:

"Because ARM rates are typically lower than fixed mortgage rates, they can help buyers find affordability when rates are high. With a lower ARM rate, you can get a smaller monthly payment or afford more house than you could with a fixed-rate loan."

But there are trade-offs. Buyers need to be aware that rates can rise after the introductory period. As Barron’s explains:

"Adjustable-rate loans offer a lower initial rate, but recalculate after a period. That is a plus for borrowers if rates come down in the future, or if a borrower sells before the fixed period ends, but can lead to higher costs if they hold on to their home and rates go up."

That’s why it’s essential to consider your timeline and financial flexibility. If you plan to move or refinance before the adjustment kicks in, an ARM could be a smart strategy in high-demand areas like Westlake Village or Simi Valley.

Is an ARM Right for You?

Every buyer’s situation is different, especially when navigating the Ventura County housing market. ARMs can be helpful tools for those looking to secure lower initial monthly payments, or buyers who plan to move again in the near future.

Still, it’s important to sit down with a local Conejo Valley mortgage lender and your financial advisor to go over all your options and make sure you’re comfortable with the risks and rewards.

Bottom Line

For the right buyer, ARMs can offer some big advantages. But they’re not one-size-fits-all. The key is understanding how they work, weighing the pros and cons, and thinking through if they’d be something that would work for you financially. And that’s why you need to talk to a trusted lender and financial advisor before you make any decisions.

If you’re planning to buy a home in Agoura Hills, Thousand Oaks, or Newbury Park, our team at Lydia Gable Realty Group is here to help guide you through the process. Let’s talk about the best financing strategies to help you move with confidence.