How does a 7/1 ARM compare to other ARM terms?

A 7/1 ARM has a longer introductory fixed-rate period than a 3/1 or 5/1 ARM. Because of this, it also typically has a higher rate, though it also has a lower rate than a 10/1 ARM. Otherwise, it functions similarly, except for the fixed-rate period lasting seven years instead of three, five or ten years.

Are there rate caps on 7/1 ARM loans?

Yes, 7/1 ARMs come with rate caps, which limit how much a payment can increase. These caps include: A periodic rate cap: Limits how much the interest rate can change from one period to the next. For a 7/1 ARM, this cap is for every year. 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.

What are the requirements to get a 7/1 ARM loan?

Adjustable-rate mortgages have similar loan requirements to many fixed-rate mortgages. These include: Credit score: 620 for a conventional loan, 580 for an FHA loan Debt-to-income (DTI) ratio: 50 percent or less Down payment: 5 percent for a conventional loan, 3.5 percent for an FHA loan

How does refinancing a 7/1 ARM work and when is it a good idea?

You can refinance your 7/1 ARM by contacting a lender and applying for a new loan. Many people with ARMs choose to refinance to a fixed-rate loan before their rate adjusts. Like shopping for your original mortgage, comparing offers from multiple lenders can help you find a good deal. Also, like when you got your original mortgage, you’ll have to submit documentation, get an appraisal and pay for closing costs when refinancing.

Compare Today's 7/1 ARM Rates

Today's 7/1 ARM loan interest rates

Lenders nationwide provide weekday mortgage interest rates to our comprehensive national survey to bring you the most current rates available. Here you can see the latest marketplace average interest rates for a wide variety of purchase loans. The table below is updated daily to give you the most current interest rates and APRs when choosing a home loan. Interest rates and APRs 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.

Product	Interest Rate	APR
7/1 ARM	7.10%	8.02%
5/1 ARM	6.79%	7.89%
10/1 ARM	7.32%	8.04%

Rates as of Tuesday, April 16, 2024 at 6:30 AM

Product	Interest Rate	APR
7/1 ARM	6.95%	7.92%
5/1 ARM	6.62%	7.80%
10/1 ARM	7.34%	8.04%

In general, ARM rates are lower than 30-year fixed-rate mortgages, but may not be lower than shorter-term fixed-rate loans. Compare ARM rates to other loan types with the chart below.

National mortgage rates by loan type

Product	Interest Rate	APR
7-1 ARM	7.10%	8.02%
30-Year Fixed Rate	7.13%	7.17%
15-Year Fixed Rate	6.64%	6.71%
30-Year Fixed Rate FHA	7.06%	7.10%
30-Year Fixed Rate VA	7.22%	7.26%
30-Year Fixed Rate Jumbo	7.40%	7.45%

Rates as of Tuesday, April 16, 2024 at 6:30 AM

Product	Interest Rate	APR
7-1 ARM	6.95%	7.92%
30-Year Fixed Rate	7.11%	7.15%
15-Year Fixed Rate	6.68%	6.75%
30-Year Fixed Rate FHA	7.18%	7.22%
30-Year Fixed Rate VA	7.72%	7.75%
30-Year Fixed Rate Jumbo	7.39%	7.43%

Rates as of Tuesday, April 16, 2024 at 6:30 AM

Bankrate displays two sets of rate averages produced from two surveys: one daily (“overnight averages”) and one weekly (“Bankrate Monitor averages”).
- Overnight averages: We calculate daily overnight rate averages on various products from several financial institutions. We collect these APRs after close of business, and they reflect the previous day’s pricing based on a borrower with a 740 FICO credit score and an 80 percent loan-to-value (LTV) ratio buying an existing, single-family primary residence.
- Bankrate Monitor (BRM) rate averages: On a weekly basis, we also collect APRs from the 10 largest banks and thrifts in 10 of the biggest U.S. markets. For these averages, we assume a borrower with a 700 FICO credit score (740 if a non-conforming loan) and an 80 percent loan-to-value (LTV) ratio, among other criteria.
The overnight and Bankrate Monitor averages are based on no existing relationship or automatic payments. Learn more about our rate averages, editorial guidelines and how we make money.

What is a 7/1 ARM loan?

It’s important to think about your financial situation and what your goals are when considering an ARM. Here’s when a 7/1 ARM may be a good idea:

You’re planning on moving within seven years.
You’re planning to refinance before the seven years is up.
You expect your income to go up before the ARM adjusts.

Consider these pros and cons when making your decision:

Pros of a 7/1 ARM

Lower introductory rate and monthly payments: An ARM often comes with a lower initial interest rate than that of a comparable fixed-rate mortgage, giving you lower monthly payments for the loan’s fixed period.
Monthly payments might decrease: If rates are lower at the time your ARM adjusts, your monthly payment could fall. Note that some ARMs have floor rates to limit how far the rate can decrease.
Good for short-term: An ARM can be appealing to those who want to sell before the rate adjusts, or who will plan to put rate savings into extra payments toward the principal.

Cons of a 7/1 ARM

Monthly payments might go up: If rates are higher after the intro period than when you took your loan out, your payments will increase.
You’ll need to plan for rising rates: If you plan to hold onto the loan after the first adjustment, you’ll need to budget for potential upward adjustments every year.
More complicated to prepay: Because of how ARM interest rates are calculated, paying extra each month won’t significantly shorten your loan term, unlike with a fixed-rate mortgage. Instead, prepaying will affect your monthly payment more.

How does a 7/1 ARM work?

Adjustable-rate mortgages tend to start off with lower interest rates than their fixed-rate counterparts, so a borrower could qualify for a bigger mortgage because the payments will be lower, at least to start out.

After seven years, the interest rate on a 7/1 ARM adjusts annually. That can mean big changes to how much interest accrues, how much you owe and how much you have to pay every month.

The variable rate on an ARM is based on a benchmark, typically the Secured Overnight Financing Rate (SOFR). This rate fluctuates based on such factors as what’s happening in the global economy and how the Federal Reserve and other central banks are responding to those trends.

Your rate can’t balloon out of control, however. ARMs have caps, so your rate can only go up to a certain limit.

How to compare 7/1 ARM rates

Step 1: Strengthen your credit score - Before you start looking for a 7/1 ARM, give your finances a checkup, and improve your credit score if needed.
Step 2: Determine your budget - A 7/1 ARM can have a high monthly payment. You’ll need a good handle on how much house you can afford.
Step 3: Know your mortgage options - Before deciding on a 7/1 ARM loan, research different types of mortgages to make an informed decision.
Step 4: Compare rates and terms from several lenders - Rate-shop with at least three different banks or mortgage companies.
Step 5: Read lender reviews: Find out what people have to say about a lender before choosing it.
Step 6: Get preapproved for a mortgage - Getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation.

Lender compare

Compare mortgage lenders side by side

Mortgage rates and fees can vary widely across lenders. To help you find the right one for your needs, use this tool to compare lenders based on a variety of factors. Bankrate has reviewed and partners with these lenders, and the two lenders shown first have the highest combined Bankrate Score and customer ratings. You can use the drop downs to explore beyond these lenders and find the best option for you.

Lender

Garden State Home Loans

NMLS: 473163

|

State License: MB-473163

3.6

Bankrate Score

Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.

Bankrate's take

Garden State Home Loans doesn’t solely work with borrowers in New Jersey; it also lends in a handful of other states, including Florida, New York, Pennsylvania and Texas. While that limits who can work with this lender, if you’re in one of its operating states, Garden State can be a smart choice if you’re looking for dedicated service — including a loan officer available nights and weekends — and swift closings.

Loans offered

Conventional, jumbo, FHA, VA, USDA, refinancing and more

Min. credit score required

Nationwide availability

Connecticut, Delaware, Florida, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Pennsylvania, Tennessee, Texas and Virginia

Min. down payment

3% for conventional loans, 3.5% for FHA loans, none for VA loans or USDA loans

Recent Customer Reviews

5.0

562reviews

Read full lender review

Lender

Homefinity

NMLS: 2289

|

State License: 4965

4.5

Bankrate Score

Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.

Bankrate's take

Homefinity is an imprint of Fairway Independent Mortgage, one of the top five mortgage lenders in the U.S. It offers many of the perks of an online lender, including up-to-the-minute rates and calculators to help you estimate your homebuying budget, refinance savings and more. It employs a smaller team of loan officers, but one that promises a fast, convenient process. If you’re a medical professional, this lender can help you get financing for your unique financial situation, too.

Loans offered

Conventional, jumbo, FHA, VA, USDA, refinancing and more

Min. credit score required

Nationwide availability

All U.S. states except Nevada and New York

Min. down payment

3% for conventional loans, 3.5% for FHA loans, none for VA loans or USDA loans

Recent Customer Reviews

4.9

1062reviews

Read full lender review

7/1 ARM loan FAQ

A 7/1 ARM has a longer introductory fixed-rate period than a 3/1 or 5/1 ARM. Because of this, it also typically has a higher rate, though it also has a lower rate than a 10/1 ARM. Otherwise, it functions similarly, except for the fixed-rate period lasting seven years instead of three, five or ten years.
Yes, 7/1 ARMs come with rate caps, which limit how much a payment can increase. These caps include:
- A periodic rate cap: Limits how much the interest rate can change from one period to the next. For a 7/1 ARM, this cap is for every year.
- 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.
Adjustable-rate mortgages have similar loan requirements to many fixed-rate mortgages. These include:
- Credit score: 620 for a conventional loan, 580 for an FHA loan
- Debt-to-income (DTI) ratio: 50 percent or less
- Down payment: 5 percent for a conventional loan, 3.5 percent for an FHA loan
You can refinance your 7/1 ARM by contacting a lender and applying for a new loan. Many people with ARMs choose to refinance to a fixed-rate loan before their rate adjusts. Like shopping for your original mortgage, comparing offers from multiple lenders can help you find a good deal. Also, like when you got your original mortgage, you’ll have to submit documentation, get an appraisal and pay for closing costs when refinancing.

Current 7/1 ARM rates

Today's 7/1 ARM loan interest rates

National mortgage rates by loan type

How Bankrate’s rates are calculated

What is a 7/1 ARM loan?

Pros of a 7/1 ARM

Cons of a 7/1 ARM

How does a 7/1 ARM work?

How to compare 7/1 ARM rates

Compare mortgage lenders side by side

About the Lender

About the Lender

7/1 ARM loan FAQ

How does a 7/1 ARM compare to other ARM terms?

Are there rate caps on 7/1 ARM loans?

What are the requirements to get a 7/1 ARM loan?

How does refinancing a 7/1 ARM work and when is it a good idea?

Additional 7/1 ARM loan resources

Mortgage rates in other states