ARM loan rates

Today's ARM mortgage rates

Lenders nationwide provide weekday mortgage rates to our comprehensive national survey. Here you can see the latest marketplace average rates for a wide variety of purchase loans. The interest rate table below is updated daily to give you the most current purchase rates when choosing a home loan. APRs and rates are based on no existing relationship or automatic payments. For these averages, the customer profile includes a 740 FICO score and a single-family residence. To learn more, see understanding Bankrate rate averages.

During the introductory period, ARM rates are typically lower than their fixed-rate counterparts. The following table compares ARM rates to rates on other types of loans:

National mortgage rates by loan type

What is an adjustable-rate mortgage and how does it work?

Adjustable-rate mortgages, or ARMs, are home loans with a variable interest rate. As opposed to fixed-rate mortgages, the interest rate on an ARM changes periodically throughout the life of the loan. Since the rate on ARMs can change, your monthly payment might increase or decrease. You can easily compare ARMs and fixed-rate mortgages with Bankrate’s ARM vs. fixed-rate calculator.

ARMs start with a fixed-rate introductory period (typically of three to 10 years) then switch to a variable rate for the remainder of the loan term. During the adjustable-rate period, the rate adjusts at set intervals — usually annually or biannually. For example: With 5/1 or 7/1 ARMs, the first five or seven years of the loan, respectively, come with a fixed rate. After that, the rate adjusts once a year. With 5/6 or 7/6 ARMs, the rate changes every six months after the first five or seven years, respectively.

Along with the variable rate, ARMs have rate caps that limit how much the rate can change. These often include:

• An initial rate cap: Limits how much the interest rate can change after the introductory period 
• A periodic rate cap: Limits how much the interest rate can change from one year to the next
• A lifetime rate cap: Limits how much the interest rate can rise over the life of the loan 
• A payment cap: Limits the amount the monthly payment can rise over the life of the loan in dollars, rather than how much the rate can change in percentage points

Be aware that your monthly payments won’t necessarily go down (or up) right away if there is a drop in interest rates. Some lenders might hold on to some or all of the rate decline and move it over to the next adjustment period — referred to as a carryover.

For example, if your rate cap is 1 percentage point and interest rates went up by 2 percent, your lender can hold onto the “extra” 1 percent and increase your monthly payment in the future even if the index rate hasn’t gone up.

Below is an example of how a 5/1 ARM could differ from a traditional 30-year fixed mortgage:

When is it a good idea to get an adjustable-rate mortgage?

Consider your current financial situation and goals. Here are some scenarios where an ARM might be a good idea:

• You can get a significantly lower APR on the ARM than with a fixed-rate mortgage
• You plan to move or refinance before the initial rate period ends

There are positives and negatives when it comes to 5/1 ARMs, however. Let’s break down the pros and cons further:

Pros of ARM loans

• Lower payments in the beginning: The lower introductory rate on an ARM makes the loan more affordable, at least initially, which frees up room in your budget month to month.
• Investment opportunity: You could take those monthly savings and invest, or put the funds toward another financial goal.
• Significant savings if you plan to move: If you’re certain you’ll offload the mortgage before the fixed-rate period ends, you could save a bundle on interest.

Cons of ARM loans

• Risk of higher rate: No one can predict how interest rates will move. Even with caps in place, your rate and payment could rise considerably over the life of the ARM.
• More challenging to budget for: With a fixed-rate mortgage, you’ll have one set payment. With an ARM, you’ll only have a set payment just for the introductory period. After that, your payment could fluctuate. This can make future budgeting or financial planning difficult. 

ARM loan requirements

When compared to other types of mortgages, ARMs typically have stricter requirements. That’s because lenders need to consider your ability to repay the loan if your rate moves higher.

• Loan amount: In 2024, homebuyers can borrow up to $766,550 for a conforming ARM (limits are higher in areas with higher home prices). You can take on a jumbo ARM which exceeds the conforming loan limit, though both these types of loans might be harder to secure.
• Credit and income: With a higher credit score, you’re more likely to get a competitive interest rate. Lenders will also look at other factors such as other debt and income.
• Down payment: Most conventional ARM loans require as little as 5 percent down.

Learn more: ARM loan requirements

How to get the best ARM rate

When comparing-shopping for an ARM rate, here are three key considerations:

1. Interest rate and annual percentage rate (APR): The APR includes the interest rate and fees, both of which vary widely among lenders. Bankrate can help you shop for adjustable- rate mortgages and receive tailored offers.
2. ARM terms: Compare a variety of ARMs — like 5/1 or 5/6 ARMs, 7/1 ARMs and 10/1 ARMs — to determine which fits you best. The introductory rates are higher on longer-term ARMs, but the tradeoff is that the fixed-rate period lasts longer.
3. Caps and other fine print: When comparing ARM loan offers, make sure you fully understand the rate caps and any other details about the structure and repayment of the loan. 

Additional ARM loan resources

• Adjustable-rate mortgage resources
• ARM calculator
• ARM refinance rates

Meet our Bankrate experts

Written by: Andrew Dehan, Writer, Home Lending

I’ve covered mortgages, real estate and personal finance since 2020. At Bankrate, I’m focused on all of the factors that affect mortgage rates and home equity. I enjoy distilling data and expert advice into takeaways borrowers can use. Prior to Bankrate, I wrote and edited for Rocket Mortgage/Quicken Loans. My work has been published by Business Insider, Forbes Advisor, SmartAsset, Crain’s Business and more.

Read more from Andrew Dehan

Edited by: Suzanne De Vita, Senior Editor, Home Lending

I’ve covered the housing market, mortgages and real estate for the past 12 years. At Bankrate, my areas of focus include first-time homebuyers and mortgage rate trends, and I’m especially interested in the housing needs of baby boomers. In the past, I’ve reported on market indicators like home sales and supply, as well as the real estate brokerage business. My work has been recognized by the National Association of Real Estate Editors.

Read more from Suzanne De Vita