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Current 5/1 ARM rates

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Today's 5/1 ARM loan rates

Lenders nationwide provide weekday mortgage rates to our comprehensive national survey to bring you the most current rates available. 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.

Product Interest Rate APR
5/1 ARM 6.61% 8.16%
7/1 ARM 6.81% 8.19%
10/1 ARM 7.15% 8.16%

Rates as of Tuesday, September 26, 2023 at 6:30 AM

What is a 5/1 ARM loan?

A 5/1 ARM is an adjustable-rate mortgage (ARM) with an introductory interest rate that remains the same for the first five years of the loan’s term. The rate can then change once a year after the initial fixed period, with the new rate pegged to market conditions at the time of the adjustment. Essentially: If rates on new mortgages are lower than your current rate when your adjustment hits, your ARM rate and monthly payment will go down. If rates are higher, your rate and costs will go up.

How does a 5/1 ARM work?

The amortization schedule is the same as for a 30-year mortgage. The interest rate will remain steady for the first five years, and then adjust annually after that. The variable interest rate after the fifth year is determined by a market index. Mortgage rates have risen sharply from their pandemic lows, so ARM holders are likely to see their payments go up if they’re in their adjustment period.

The variable rate on an ARM is tied to a benchmark, typically the Secured Overnight Financing Rate (SOFR). This rate moves 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.

You’re protected from steep year-to-year increases, however, because the loan has rate caps limiting the changes in both rates and payments:

  • 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 (for example, 30 years).
  • 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.

How to compare 5/1 ARM rates

When shopping around for a mortgage, compare mortgage rates and closing costs. Bankrate can help you shop for mortgage quotes through our mortgage rate tables, which allow you to plug in general information about your finances and location to receive tailored offers.

When comparing offers, consider the interest rate and annual percentage rate (APR). The APR includes the interest rate and fees incurred when borrowing. Be sure to compare a 5/1 ARM to other ARM terms, as well. 7/1 ARMs, for example, have higher rates, but the tradeoff is that the fixed-rate period lasts longer.

Pros and cons of a 5/1 ARM

As with most financial products, 5/1 ARMs have their benefits and drawbacks. Here are the key things to know:


  • It has lower rates and payments early in the loan term.
  • You might be able to qualify for a larger mortgage thanks to lower initial payments.
  • You might be able to invest the initial monthly savings.
  • It offers a cheaper route to homeownership for those who don’t plan on living in one place for very long.


  • Rates and payments can rise significantly over the life of the loan.
  • Some annual caps don’t apply to the initial loan adjustment, making it difficult to swallow that first reset.
  • These loans are more complex, so you might need to be more proactive and savvy in managing your account.

When should you consider a 5/1 ARM?

ARMs can be a good option when rates are high. Given that, a small number of borrowers are taking ARMs today — they accounted for just 6 percent of mortgage applications as of spring 2023.

In general, ARMs usually only make sense if the rate and other fees combined equal a lower APR than a fixed mortgage for the term.

Learn more about choosing between an ARM and a fixed-rate mortgage.

Written by: Jeff Ostrowski, Senior Mortgage Reporter for Bankrate

Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.

Read more from Jeff Ostrowski