Quick answer: On a $900,000 Louisville 80027 home with 20% down, a 5-year ARM at MBA's 6.46% average costs about $4,532 a month in principal and interest, versus $4,946 at Freddie Mac's 7.32% 30-year fixed average. That is about $414 less a month for 60 months, but the first reset can add 2 points.
By Katerina Veteskova, Colorado real estate broker license FA.100082955, eXp Realty, LLC
The Mortgage Bankers Association (MBA) reports that ARMs made up 10.5% of mortgage applications in the week ending October 16, 2026, with its 5/1 ARM rate 0.95 points under its own 30-year fixed rate of 7.41%. At Louisville prices, that gap is real money.
All figures here assume a $900,000 purchase, 20% down and a $720,000 loan, and they count principal and interest only. The fixed rate is 7.32%, the Freddie Mac PMMS 30-year average as of October 22, 2026, the latest weekly print when I checked on October 27, 2026. The ARM rate is 6.46%, the 5/1 ARM average in the MBA weekly survey for the week ending October 16, 2026. The rates come from different surveys, so treat the 0.86-point gap as a starting point for a lender quote.
How much does a 5-year ARM save on a $900,000 Louisville 80027 home?
About $414 a month, or about $24,836 over the 60 months before the first rate change.
A $900,000 price falls inside the Louisville $700K to $1M search, and the zipcode itself has its own 80027 Louisville homes from $700K search. On the $720,000 loan:
- 30-year fixed at 7.32%: about $4,946 a month for all 30 years
- 5-year ARM at 6.46%: about $4,532 a month for the first 60 months
- Monthly difference: about $414 in the ARM's favor
The ARM also pays down principal a bit faster. After 60 months the ARM balance is about $673,688, against about $680,014 on the fixed loan, a gap of about $6,326. Add that to the payment savings and the ARM is ahead by about $31,162 when it first resets.
What happens when the ARM rate resets after five years?
The rate can rise by as much as 2 points at the first change, to 8.46%, and never more than 5 points over the start rate, or 11.46%.
Fannie Mae lists its standard 5-year SOFR ARM plan with 2/1/5 caps in its qualifying payment rules: up to 2 points at the first change, 1 point at each later change and 5 points over the life of the loan. Figured on the month-60 balance with 25 years left:
- At 8.46%: about $5,407 a month, or $461 more than the fixed payment
- At 9.46%: about $5,867 a month, or $921 more
- At the 11.46% lifetime ceiling: about $6,828 a month, or $1,882 more
If the rate jumped to 8.46% and stayed there, the $31,162 head start would be used up in about 68 months. A reset can also go down, though under the Fannie Mae ARM rules the rate never falls below the loan's margin. I do not forecast the index.
Get new Louisville homes from $700K
Email me new Louisville listings from $700,000 as soon as they hit the market, so I can price an ARM against a fixed loan before I tour.
Does an ARM make it easier to qualify for a Louisville home?
No: on a 5-year ARM, Fannie Mae has lenders qualify you at the note rate plus the 2-point first cap, or the fully indexed rate if that is higher, so this loan is underwritten at 8.46%, about $5,516 a month.
That is about $570 more than the $4,946 qualifying payment on the 7.32% fixed loan. The ARM lowers what you pay at first, not what you can borrow. Fannie Mae's 7- and 10-year ARMs generally qualify at the note rate but carry wider 5/1/5 caps, and I have not priced them here.
Is a $900,000 Louisville loan conforming or jumbo in 2026?
Conforming: Louisville is in Boulder County, where the FHFA 2026 conforming loan limit for a one-unit home is $879,750, so a $720,000 loan sits about $159,750 under the line.
With 20% down, that limit covers purchases up to about $1,099,687. On a $1,000,000 home you would need about $120,250 down, a little over 12%, to stay conforming. The same Boulder County limit applies to the Lafayette homes from $700K search, while in Broomfield County the 2026 limit is $862,500.
What are 80027 prices doing while you decide?
Easing slightly, according to Redfin: the 80027 median sale price was $825,757 over the three months ending September 2026, down 2.0% from a year earlier, and homes sold for a median 98.4% of list.
The median home sold in 51 days, 4 fewer than a year earlier, 38.5% of homes had a price drop, 18.6% sold above list, and the Compete Score was 63 out of 100. At the 80027 median with 20% down, the loan would be about $660,606, or about $4,538 a month fixed and $4,158 on the ARM. 80027 also covers Superior, so these are zipcode figures, not city figures.
Should you choose a 5-year ARM or a 30-year fixed in Louisville?
Choose the ARM when you are confident you will sell or refinance within about five years, and choose the fixed loan when you plan to stay longer or need the lower qualifying payment.
Choose the 5-year ARM if:
- You expect to sell or refinance before month 60
- You could handle a payment near $5,407 if the first reset hits its cap
- Your lender's ARM quote, points included, still beats the fixed rate by close to 0.86 points
Choose the 30-year fixed if:
- You plan to keep this Louisville home well past five years
- You need the lower qualifying payment of about $4,946
- You want the same payment for all 30 years
Check the points too: MBA shows 1.11 points on its 5/1 ARM rate against 0.75 on its 30-year fixed. On a $720,000 loan that is about $7,992 versus $5,400, or about $2,592 more at closing for the ARM.
Which Louisville and nearby searches fit a $900,000 budget?
Start with the Louisville homes from $700K search, then look one step up at Louisville homes from $1.2M. The Superior side of the same zipcode has its own 80027 Superior homes from $700K search, plus Superior $700K to $1M and Superior homes from $1.2M.
Elsewhere, try Boulder $700K to $1M, Boulder homes from $1.2M, Broomfield $700K to $1M, 80020 Broomfield homes from $700K or the Front Range $700K to $1M search. Moving from out of state? The relocating to Boulder County guide covers the US-36 corridor.
Broker view: "When a Louisville buyer asks me about an ARM, I set the $414 monthly saving next to the $461 jump at the first capped reset. If the plan to move within five years is firm, the ARM can earn its keep; if it is a guess, I lean fixed." - Katerina Veteskova, eXp Realty, LLC
What this guide does not cover: 7- and 10-year ARM pricing, jumbo loans, FHA, VA and CHFA loans, rate forecasts, SOFR index levels and lender margins, property tax, homeowners insurance, HOA or metro district dues, and closing costs beyond points. I can run the non-forecast items for a specific Louisville listing.
Sources: Freddie Mac PMMS, 30-year fixed average of 7.32% as of October 22, 2026. MBA Weekly Mortgage Applications Survey for the week ending October 16, 2026, released October 21, 2026. Fannie Mae Selling Guide B3-6-04 and B2-1.4-02. FHFA 2026 conforming loan limits by county. Redfin 80027 zipcode housing market page, three months ending September 2026, checked October 27, 2026. Payment, balance and break-even figures are my own arithmetic from those numbers.
Weighing an ARM against a fixed loan on a Louisville home? Call or text 720-646-4685, or request a tour.
Frequently asked questions
How much lower is a 5-year ARM payment on a $900,000 Louisville home?
About $414 a month with 20% down: roughly $4,532 at 6.46% versus $4,946 at the 7.32% fixed average, for the first 60 months of the loan.
How high can a 5-year ARM payment go after the first reset?
With Fannie Mae's 2/1/5 caps, the first change can lift a 6.46% start rate to 8.46%, about $5,407 a month on this loan. The lifetime ceiling is 11.46%, about $6,828 a month.
Will a 5-year ARM help me qualify for a bigger Louisville loan?
No. Fannie Mae qualifies a 5-year ARM at the note rate plus the 2-point first cap, or the fully indexed rate if higher, so this $720,000 loan is underwritten at about $5,516 a month.
Is a $720,000 loan in Louisville a jumbo loan in 2026?
No. Louisville is in Boulder County, where FHFA's 2026 conforming limit for a one-unit home is $879,750, about $159,750 above this loan.
Katerina Veteskova is a Colorado real estate broker (license FA.100082955) with eXp Realty, LLC. Call or text 720-646-4685, or request a tour.
