By Benjamin Finnerty (S), REALTOR® (RS-83812) with Keller Williams Realty Maui · Kīhei, Maui · 808-481-9748

Quick Answer: For the week ending Oct. 16, 2026, the Mortgage Bankers Association’s average 5/1 ARM rate was 6.46%, versus 7.41% for a 30-year fixed conforming loan. On a $975,200 loan (20% down on Maui’s $1,219,000 median home), that’s about $621 a month less during the fixed period, with the risk of higher payments after it ends.

I’m Benjamin Finnerty, a REALTOR® in Kīhei with Keller Williams Realty Maui. With fixed rates above 7%, more buyers are asking me whether an adjustable-rate mortgage on Maui makes sense. An ARM can lower the payment for years, but it trades certainty for that savings. Here’s how today’s ARMs work, what the payment math looks like on a Maui median-priced home, and the questions to ask your lender.

General information, not financial, tax or legal advice. Talk with a licensed mortgage loan originator about your situation.

What are mortgage rates on Maui right now?

These are national averages; your own quote will depend on credit, down payment, loan size and property type. As of late October 2026:

Loan type	Rate	Points	Source and date
30-year fixed	7.32%	n/a	Freddie Mac, Oct. 22, 2026
15-year fixed	6.68%	n/a	Freddie Mac, Oct. 22, 2026
30-year fixed, conforming	7.41%	0.75	MBA, week ending Oct. 16, 2026
30-year fixed, jumbo	7.33%	0.60	MBA, week ending Oct. 16, 2026
5/1 ARM	6.46%	1.11	MBA, week ending Oct. 16, 2026

Freddie Mac and MBA use different surveys, so compare rates within the same source. MBA points include the origination fee, for 80% loan-to-value loans.

A year earlier, Freddie Mac’s 30-year average was 6.19%. ARMs made up 10.5% of mortgage applications in the MBA’s latest weekly survey. The Federal Reserve’s meeting ending Oct. 28 is the next event to watch; my post on the October Fed meeting and Maui mortgage rates covers it.

How does an adjustable-rate mortgage work?

Most conventional ARMs today are SOFR ARMs. You get a fixed rate for an initial period (5, 7 or 10 years), then the rate adjusts every six months based on the 30-day average SOFR, an index published by the Federal Reserve Bank of New York, plus a margin set in your loan.

Freddie Mac’s SOFR ARM fact sheet lists these standard caps (first adjustment / each later adjustment / lifetime):

ARM type	Fixed period	Adjusts	Caps
5/6 SOFR ARM	5 years	Every 6 months	2% / 1% / 5%
7/6 SOFR ARM	7 years	Every 6 months	5% / 1% / 5%
10/6 SOFR ARM	10 years	Every 6 months	5% / 1% / 5%

Source: Freddie Mac SOFR ARM fact sheet; MGIC “Getting Comfortable with ARMs” (April 2026).

Notice the difference: on a 7/6 or 10/6, the rate can jump the full 5% at the first adjustment. On a 5/6, the first jump is capped at 2%.

What would an ARM save on a Maui median-priced home?

Here’s an illustration using RAM’s January–September 2026 countywide single-family median of $1,219,000 and 20% down, for a $975,200 loan. That’s under Maui’s 2026 conforming loan limit of $1,299,500, explained in my conforming loan limit guide.

Scenario (principal and interest only)	Rate	Monthly payment
30-year fixed (MBA conforming average)	7.41%	$6,759
ARM, initial fixed period (MBA 5/1 average)	6.46%	$6,138
5/6 ARM after a maximum 2% first increase (year 6)	8.46%	$7,323
ARM at the 5% lifetime cap	11.46%	$9,248

Illustrative math only, not a quote. Excludes taxes, insurance, HOA dues and mortgage insurance. Reset payments are calculated on the remaining balance after five years.

The fixed-period savings are about $621 a month, or roughly $37,000 over five years. Where the rate lands in year six depends on the SOFR index plus your margin at that time. If that total is higher than the fixed rate you passed up, the payment can rise above the fixed-rate payment. On a 7/6 or 10/6, the first adjustment can be as large as 5%.

How do lenders qualify you for an ARM?

It depends on the fixed period. MGIC’s April 2026 guide says ARMs with fixed periods of five years or less are typically qualified at the greater of the note rate plus 2% or the fully indexed rate, while 7- and 10-year ARMs qualify at the note rate. A 5/6 ARM may not boost your buying power as much as the lower starting rate suggests. Ask your lender which rule applies.

When might an ARM make sense on Maui?

These are scenarios to discuss with a lender, not predictions:

• You expect to sell or refinance within the fixed period. A 7/6 or 10/6 can match a plan to move within seven to ten years.
• You have strong reserves. If you could handle the capped payment, the reset risk is easier to live with.
• You’re comparing against other tools. A seller-paid rate buydown or an assumable loan may lower your payment without reset risk.

An ARM is harder to justify if you plan to stay long term and couldn’t absorb the capped payment. Refinancing later isn’t guaranteed; it depends on rates, your income and the home’s value at that time.

My Take: How I Help Buyers Weigh an ARM

When buyers ask me about an ARM, I start with a complete assessment of what the best payment is for their situation. That means looking at the overall payment, not just the rate, and considering all aspects of their financial situation before deciding on a course of action with their lender. Points matter too: in the MBA survey, the ARM’s 1.11 points versus 0.75 on the fixed loan narrows the gap.

My practical steps: ask your lender for side-by-side quotes on a 30-year fixed, a 7/6 and a 5/6, including points, margin and caps. Run the capped payment, not just the starting payment, against your budget. And check whether the condo or home you’re considering affects the loan options; condo project approval and jumbo rules can change what’s available.

Adjustable-Rate Mortgage FAQ

What is the current 5/1 ARM rate?
6.46% with 1.11 points for the week ending Oct. 16, 2026, per the Mortgage Bankers Association.

How often does a SOFR ARM adjust?
Every six months after the initial fixed period, per Freddie Mac’s SOFR ARM terms.

How high can my ARM rate go?
Standard SOFR ARMs carry a 5% lifetime cap above the starting rate. Your note lists your exact caps.

Is an ARM a good idea for a Maui condo?
It depends on your plans, reserves and the building’s financing eligibility. Compare the capped payment with a fixed loan before deciding.

Ask Benjamin

Trying to decide between a fixed loan, an ARM or a seller credit on a Maui home? I’m Benjamin Finnerty, and I’m happy to run the numbers with you and your lender on the homes you’re considering. Call or text me at 808-481-9748 or email benjamin@the808team.com.

Sources: Freddie Mac Primary Mortgage Market Survey (Oct. 22, 2026); Mortgage Bankers Association Weekly Applications Survey (week ending Oct. 16, 2026, as reported by MBA, HousingWire and The MortgagePoint, Oct. 21, 2026); Freddie Mac SOFR ARM fact sheet; MGIC, “Getting Comfortable with ARMs” (April 2026); REALTORS® Association of Maui, September 2026 report.