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Current 7/1 ARM rates

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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% 8.06%
5/1 ARM 6.79% 7.98%
10/1 ARM 7.58% 8.06%

Rates as of Monday, December 04, 2023 at 6:30 AM

While adjustable-rate mortgages (ARMs) fell from favor during the era of low interest rates, they could be the right loan product today for some borrowers.

Adjustable-rate mortgages are best for those who plan to keep them only for the initial term. If you’re looking to move within seven years, or know you’ll be able to refinance to lock in your interest rate in that time, a 7/1 ARM could be the right mortgage for you.

Use Bankrate's ARM vs. fixed-rate mortgage calculator to see which type of mortgage works best for you.

What is a 7/1 ARM loan?

It all comes down to the terminology. With adjustable-rate mortgages, the numbers dictate the terms. The number before the slash is the period that your interest rate is fixed, and the number after the slash is how often the interest rate changes after that. So, 7/1 means your rate is fixed for the first seven years, and then adjusts annually (every year) after that.

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

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 7/1 ARM to other ARM terms, as well. 3/1 and 5/1 ARMs, for example, have lower rates, but the tradeoff is that the fixed-rate period ends sooner.

When should you consider a 7/1 ARM?

Adjustable-rate mortgages are best for people who are only planning to hold them for the initial term. So, if you’re looking to move within seven years, or know you’ll be able to refinance to lock in your interest rate in that time, a 7/1 ARM could be the right mortgage for you.

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.