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Adjustable-Rate Mortgage Rates Today | ARM Rate Trends

By Wirly Editorial Team | Updated March 29, 2026

Adjustable-Rate Mortgage Rates Today | ARM Rate Trends

Adjustable-Rate Mortgage Rates Today: What Borrowers Need to Know

If you are wondering whether adjustable-rate mortgage (ARM) rates went up or down recently, the short answer is that ARM rates have been fluctuating alongside broader economic conditions. According to Freddie Mac’s Primary Mortgage Survey data, the average 5/1 ARM rate has generally remained below the 30-year fixed-rate mortgage average throughout 2024 and into 2025, offering borrowers a lower initial interest rate in exchange for future rate uncertainty. As of early 2025, 5/1 ARM rates have hovered roughly 0.5 to 0.75 percentage points below comparable 30-year fixed rates, though these figures are subject to change daily.

For borrowers considering a refinance or a new home loan, understanding how ARM rates compare to fixed-rate options is essential before making a decision. You can use Wirly’s refinance calculator to estimate how different rate scenarios affect your monthly payment and total cost over the life of the loan.

Weekly National Mortgage Interest Rate Trends

Mortgage rates across all product types have been influenced by Federal Reserve policy, inflation data, and labor market conditions. It is important to clarify a common misconception: the Federal Reserve does not directly set mortgage rates. The Fed sets the federal funds rate, which is the overnight lending rate between banks. Mortgage rates, including ARM loan rates, are influenced by this policy indirectly through their effect on bond markets and lender expectations.

According to Freddie Mac’s weekly Primary Mortgage Rate Survey, the average 30-year fixed mortgage rate has fluctuated between roughly 6.5% and 7.1% over recent months. The 15-year fixed rate has generally tracked about 0.5 to 0.7 percentage points lower. Meanwhile, 5/1 ARM rates have typically offered the lowest entry point among conventional mortgage products.

Keep in mind that these are national averages. Your actual rate may differ significantly based on your credit score, loan amount, down payment, property type, and geographic location. According to the Consumer Financial Protection Bureau (CFPB), even saving a fraction of a percent on your interest rate can save you thousands of dollars over the life of your mortgage loan, so it pays to shop around and compare offers from multiple lenders.

Today’s ARM Mortgage Rates by Product Type

Conforming Adjustable-Rate Mortgage (ARM) Loans

Conforming ARM loans follow guidelines set by Fannie Mae and Freddie Mac, with loan amounts at or below the conforming limit (currently $766,550 in most counties, according to the FHFA). These tend to offer the most competitive rates because they carry less risk for lenders who can sell them on the secondary market.

Jumbo Adjustable-Rate Mortgage (ARM) Loans

For loan amounts above the conforming limit, jumbo ARM loans are available but typically carry a slightly higher interest rate. However, the gap between jumbo ARM rates and conforming ARM rates has narrowed in recent years. Borrowers with strong credit profiles may find jumbo ARM rates surprisingly competitive.

Federal Housing Administration (FHA) Loans

The FHA offers adjustable-rate mortgage options as well, though they are less commonly used than FHA fixed-rate products. FHA ARM loans require mortgage insurance for the life of the loan in most cases, which adds to the total annual percentage rate (APR) beyond the quoted interest rate.

How Adjustable-Rate Mortgages Work

With an adjustable-rate mortgage, your interest rate may change periodically after an initial fixed-rate period. For example, a 5/1 ARM offers a fixed rate for the first five years, then adjusts once per year based on a market index plus a lender margin. A 7/1 ARM locks your rate for seven years before annual adjustments begin.

The “initial fixed-rate period” is the stretch of time when your rate and payment amount stay constant. After that period ends, your rate may increase or decrease depending on market conditions. Most ARM loans include caps that limit how much your rate can change at each adjustment and over the life of the loan.

  • Initial adjustment cap: Limits the first rate change after the fixed period ends (commonly 2 percentage points)
  • Periodic adjustment cap: Limits each subsequent annual change (commonly 2 percentage points)
  • Lifetime cap: Limits total rate increase over the original rate (commonly 5 to 6 percentage points)

Understanding these caps is critical. Even with caps in place, a 5/1 ARM that starts at 6.0% could theoretically reach 11.0% or 12.0% over time, dramatically increasing your mortgage payment.

Is Now a Good Time for an Adjustable-Rate Mortgage?

Whether an ARM makes sense depends on your financial situation, time horizon, and risk tolerance. Here are scenarios where an adjustable rate mortgage may be worth considering:

  • You plan to sell or refinance within the initial fixed period. If you expect to move within five to seven years, you may benefit from the lower initial rate without facing adjustments.
  • You expect rates to decline. If economic indicators suggest the Fed will continue cutting the federal funds rate, ARM rates may adjust downward after the fixed period, potentially saving you money.
  • You want to maximize purchasing power. The lower initial rate on an ARM loan can reduce your monthly payment, potentially allowing you to qualify for a larger loan amount.

However, ARM loans are not ideal for everyone. If you plan to stay in your home long-term and value payment predictability, a fixed-rate mortgage may offer more stability even at a slightly higher initial rate.

Types of ARM Loans

ARM loans come in several variations, each with a different initial fixed-rate period:

  • 3/1 ARM: Fixed for 3 years, then adjusts annually
  • 5/1 ARM: Fixed for 5 years, then adjusts annually (the most popular ARM type)
  • 7/1 ARM: Fixed for 7 years, then adjusts annually
  • 10/1 ARM: Fixed for 10 years, then adjusts annually
  • 5/6 ARM: Fixed for 5 years, then adjusts every 6 months

The longer the initial fixed-rate period, the closer the starting rate tends to be to a comparable fixed rate. A 10/1 ARM, for instance, may only offer a modest rate discount compared to a 30-year fixed-rate mortgage.

How to Get the Best ARM Rate

According to the CFPB, your credit score is one of the most significant factors that affects your mortgage rate. Here are actionable steps to secure the best possible ARM rate:

  • Improve your credit score. A higher score typically qualifies you for lower rates. Check your reports for errors and pay down revolving balances before applying.
  • Compare multiple lenders. Get quotes from at least three to five lenders, including banks, a credit union, and online lenders. Rates and fees can vary significantly.
  • Consider the full APR. The annual percentage rate includes the interest rate plus lender fees, giving you a more complete picture of borrowing costs. For ARM loans, the APR calculation assumes future rate adjustments, so review it carefully.
  • Negotiate closing costs. Some lenders offer lower rates in exchange for higher closing costs, or vice versa. Ask about different pricing options.
  • Lock your rate strategically. Rate locks typically last 30 to 60 days. Ask about lock expiration policies and whether a float-down option is available if rates drop before closing.

ARM Loan Requirements

Qualifying for an ARM loan generally requires meeting the same standards as a fixed-rate mortgage, though lenders may apply additional scrutiny:

  • Credit score: Most conventional ARM loans require a minimum score of 620, though scores of 740 or higher typically secure the best rates
  • Debt-to-income ratio: Generally 43% or lower, with some exceptions
  • Down payment: Typically 5% to 20% for conventional loans. Putting down less than 20% usually requires mortgage insurance
  • Income documentation: Pay stubs, tax returns, and bank statements are standard requirements

Lenders may qualify you based on a higher rate than the initial rate to ensure you can handle potential payment increases. This is a consumer protection measure that helps prevent borrowers from taking on more risk than they can manage.

Risks and Considerations

Before choosing an ARM, understand the potential downsides:

  • Payment shock: When the initial fixed-rate period ends, your monthly payment could increase substantially. On a $400,000 loan, even a 2 percentage point increase could add roughly $500 or more to your monthly payment.
  • Refinancing is not guaranteed. Many ARM borrowers plan to refinance before adjustments begin, but your financial situation, credit score, or home value could change, making refinancing difficult or costly.
  • Break-even analysis matters. If closing costs on a refinance to an ARM total $5,000 and you save $150 per month compared to a fixed rate, it takes over 33 months to break even. If you plan to move before that point, the ARM may actually cost you more.
  • Amortization reset risk: Refinancing into a new 30-year ARM resets the amortization clock, meaning you pay more interest over time even if the rate is lower.
  • Multiple hard inquiries: Shopping for the best rate is smart, but multiple mortgage applications generate hard credit inquiries. The good news is that credit scoring models typically count mortgage inquiries within a 14 to 45 day window as a single inquiry.

According to CFPB complaint data from 2024, the most common mortgage-related complaint across major servicers is trouble during the payment process. This underscores the importance of choosing a reliable lender and understanding your loan terms thoroughly before signing, especially with an ARM where payment amounts will change over time.

What This Means for You

ARM rates today remain lower than fixed-rate alternatives, which can be attractive for certain borrowers. However, the decision between a fixed rate and an adjustable rate mortgage should be based on your personal timeline, risk tolerance, and financial goals – not just today’s rate spread.

If you are considering refinancing your current mortgage into an ARM, use Wirly’s refinance calculator to model different scenarios. Compare the total cost of a fixed-rate mortgage versus an ARM over your expected time in the home, including closing costs and potential rate adjustments.

Remember that rates change daily and sometimes multiple times per day. The figures discussed in this article reflect general trends and should not be used as rate quotes. Always check current rates from multiple lenders before making a decision.

Frequently Asked Questions

Did the Fed cut mortgage rates today?

The Federal Reserve does not directly control mortgage rates. When the Fed adjusts the federal funds rate, it influences mortgage rates indirectly, often with a delay. Mortgage rates are primarily driven by bond market activity, investor demand, and economic outlook.

Is a variable rate mortgage the same as an ARM?

In the United States, “variable rate mortgage” and “adjustable-rate mortgage” are often used interchangeably. Both refer to a mortgage loan where the interest rate can change after the initial fixed-rate period. In other countries like the UK, variable rate products may have different structures and terminology.

How often do ARM rates adjust?

It depends on the specific ARM product. A 5/1 ARM adjusts once per year after the initial five-year fixed period. A 5/6 ARM adjusts every six months. Your loan documents will specify the exact adjustment schedule and the index used to calculate your new rate.

Sources

Disclaimer: This article is for educational purposes only and does not constitute financial advice. Wirly is not a lender or mortgage broker. Mortgage rates are subject to change daily. Your actual rate will depend on your individual financial profile, property details, and lender. Consult with a qualified financial professional before making any mortgage decisions.

Sources

Written by the Wirly Editorial Team. Last reviewed: March 29, 2026. Fact-checked against Freddie Mac PMMS 2025, FRED economic data, CFPB interest rate guidance, CFPB 2024 complaint data, FHFA 2024 conforming loan limits. See our methodology for how we evaluate lenders.

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This guide is for educational purposes only. Consult a licensed mortgage professional for personalized advice. Wirly is not a lender or mortgage broker.