Current ARM Rates

Compare current adjustable-rate mortgage (ARM) rates to find the best rate for you. Lock in your rate today and see how much you can save.

Current ARM Rates

Today’s current ARM rates are as follows:

  • 10/1 ARM: % today vs. % last week
  • 7/1 ARM: % today vs. % last week
  • 5/1 ARM: % today vs. % last week

The 52-week high for a 10/1 ARM was % and the 52-week low was %.

The 52-week high for a 7/1 ARM was % and the 52-week low was %.

The 52-week high for a 5/1 ARM was % and the 52-week low was %.

What Is an ARM?

ARMs are home loans whose rates can vary over the life of the loan. Unlike a fixed-rate mortgage, which carries the same interest rate over the entirety of the loan term, ARMs start with a rate that’s fixed for a short period, say five years, and then adjust.

For example, a 5/1 ARM will have the same rate for the first five years, then can adjust each year after that—meaning the rate might go up or down, based on the market.

How Does an ARM Work?

ARMs are always tied to some well-known benchmark—an interest rate that’s published widely and easy to follow—and reset according to a schedule your lender will tell you in advance. But since there’s no way of knowing what the economy or financial markets will be doing in several years, they can be a much riskier way to finance a home than a fixed-rate mortgage.

ARMs: Pros and Cons

ARMs often, though not always, carry lower interest rates than fixed-rate mortgages do. Borrowers typically pay a small premium for the peace of mind of having one set rate for many years. That’s not always the case, though—there was essentially no cost savings in opting for an ARM during the past few years when all interest rates were at rock-bottom levels—so it always pays to shop around.

The risks that accompany ARMs are no longer just hypothetical. The Federal Reserve, which sets interest rates throughout the economy, has embarked on what most analysts think will be a multi-year cycle of raising rates. Any ARM that you take out now will almost certainly have a higher, and possibly substantially higher, rate when it resets in a few years.

But an ARM may still be a very good option for you, particularly if you don’t think you’ll stay in your home for a long time. Some ARMs have initial rates that last five years, but others can be as long as seven or 10 years.

ARMs Vs. Fixed-Rate Mortgages

Fixed-rate mortgages are often considered a wiser option for most borrowers. Being able to lock in a low interest rate for 30 years—but still have the option to refinance as you want, if conditions change—often makes the most financial sense. Not to mention it’s predictable, so you know exactly what your rate is going to be over the course of the loan term.

But not everyone expects to stay in their home for years and years. You may be buying a starter home with the intention of building some equity before moving up to a “forever home.” In that case, if an ARM has a lower interest rate, you may be able to direct more of your money into that nest egg.

Alternatively, an ARM with a lower rate than a fixed-rate mortgage may simply be more affordable for you. As long as you’re comfortable with the idea of selling your home or otherwise moving on before the ARM’s initial rates reset—or taking the chance that you’ll be able to afford the new, higher payments—that may also be a reasonable choice.

How to Get the Best ARM Rate

Multiple studies have shown that borrowers who shop around get better rates and terms than those who settle for the first option they find. If you’re not sure whether an ARM or a fixed-rate mortgage makes more sense for you, you should research lenders who offer both. A mortgage professional like a broker may also be able to help weigh your options.

Frequently Asked Questions (FAQs)

When should you consider an ARM?

You may want to consider an ARM if you don’t plan to stay in your home for a long period of time. Many ARMs have an initial fixed-rate period of five, seven or 10 years, which may be about as long as you expect to own the home.

Another good reason for considering an ARM is if you can’t afford the monthly payment with a fixed-rate mortgage. You’ll want to be sure you have an exit strategy before the ARM resets to a higher rate, however. You might also have owned the home for some time and need a slightly lower monthly payment for a while before you get ready to sell in a few years.

Why are ARM rates lower than fixed rates?

Except in exceptional circumstances, borrowers usually pay a little more for the peace of mind that a long-term, fixed-rate mortgage brings. ARMs are riskier, since they reset to a different (likely higher) rate once their initial phase is done.

What factors affect ARM rates?

Everything from global supply chain snafus to monetary policy decisions to bond market maneuverings can affect ARM rates. In other words, it can be tricky to forecast interest rates in a few weeks—and especially in a few years. That’s why ARMs are seen as riskier than fixed-rate mortgages.

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