ARM Refinance in Arizona: Should You Switch to a Fixed Rate in 2026?

Refinancing an adjustable-rate mortgage (ARM) into a fixed-rate loan in Arizona makes sense in 2026 if your ARM is at or near its adjustment date and today's fixed rates — averaging about 6.5% on a 30-year refinance and roughly 5.65% on a 15-year, per NerdWallet's July data — are at or below where your ARM is headed. If your ARM could reset one to two points higher, locking a fixed rate now buys payment certainty and removes the risk of future adjustments entirely.

Thousands of Phoenix and Scottsdale homeowners took 5/1, 7/1, and 10/1 ARMs during 2020–2022 to shave cost off jumbo and conventional loans. Many of those intro periods are now expiring — and the question we hear most at Pillar Mortgage Group is whether to ride out the adjustment or refinance into a fixed rate. Here's how to decide.

When Refinancing Your ARM to a Fixed Rate Makes Sense

The strongest case for an ARM refinance is an upcoming rate reset. Most ARMs adjust based on the SOFR index plus a margin — commonly 2.75 to 3 points. With short-term rates still elevated in mid-2026, many resetting ARMs are adjusting into the 7% range or higher, while Arizona 30-year fixed refinance rates sit near 6.5%. If your reset rate would exceed today's fixed rate, refinancing is usually straightforward math.

It also makes sense if you simply value certainty. Arizona's average refinance loan is large — about $567,000, per Wirly's 2026 state data, well above the national average — so a one-point adjustment can swing a Valley homeowner's payment by several hundred dollars a month. A fixed rate ends that exposure permanently.

When Keeping Your ARM Might Be Smarter

Not every ARM should be refinanced. If your intro rate still has two or more years left and sits below 5%, refinancing into a 6.5% fixed loan raises your payment today to insure against a future that may include lower rates. And if you plan to sell your Phoenix home within a couple of years, closing costs — typically 2–5% of the loan amount — may never break even. Run the numbers on your specific reset date, caps, and timeline before deciding.

Check your ARM's rate caps too. Most ARMs limit each adjustment (often 2%) and total lifetime increase (often 5%). Knowing your worst case makes the comparison honest: sometimes the cap math favors waiting one more cycle, sometimes it screams refinance now.

How the ARM Refinance Process Works in Arizona

An ARM-to-fixed refinance works like any rate-and-term refinance: application, appraisal (often waived with strong equity), underwriting, and closing — typically two to four weeks with a responsive borrower. As a brokerage, we shop your scenario across multiple wholesale lenders, which matters for ARM refinances because pricing on jumbo and Non-QM fixed loans varies widely lender to lender. Self-employed homeowners in Scottsdale can use bank statement programs, and investors can refinance ARMs on rentals using DSCR loans that qualify on rental income.

If your ARM is on a second home or investment property in the Valley — or you're weighing whether to sell instead — you can browse the current market at Arizona Luxury Property Search to see what your equity could do next.

Frequently Asked Questions

Should I refinance my ARM to a fixed-rate mortgage in 2026?

Refinance if your ARM is adjusting soon and its reset rate would exceed today's roughly 6.5% Arizona fixed refinance average, or if you want permanent payment certainty. Keep the ARM if your intro rate is still low with years remaining, or if you plan to sell before closing costs break even.

How much higher can my ARM rate go when it adjusts?

Check your loan's caps. Typical ARMs allow a 2% increase per adjustment and a 5% lifetime increase over the start rate. A 4.5% ARM from 2021 could ultimately reach 9.5% at its lifetime cap, which is why many Arizona homeowners refinance before the first or second reset.

What are refinance rates in Arizona right now?

As of July 2026, the average 30-year fixed refinance APR in Arizona is about 6.51%, slightly below the national average, and 15-year refinance rates average roughly 5.65%, according to NerdWallet. Your actual rate depends on credit score, equity, loan size, and property type — brokers can shop multiple lenders for the best pricing.

Can I refinance an ARM if I'm self-employed?

Yes. Self-employed Arizona homeowners can refinance an ARM using full-documentation loans or, if tax returns understate income, bank statement and other Non-QM programs. Investors can use DSCR refinances that qualify on the property's rental income rather than personal income.