Today’s 7/1 ARM Rates
The table below brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive 30-year mortgage rates. This interest rate table is updated daily to give you the most current rates when choosing a 30-year mortgage loan.
Rates as of Friday, October 30, 2020 at 6:30 AM
So you’re considering an adjustable-rate mortgage. While they lost some popularity after the Great Recession, and are seeing some serious competition from fixed-rate mortgages these days thanks to current low interest rates, they could still be the right loan product for some people.
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 they can enable homeowners to qualify for a bigger mortgage because the payments will be less, at least to start out. As noted above, after seven years, a 7/1 ARM will begin to see annual adjustments to the interest rate, and that can mean big changes to how much interest accrues, how much you owe, and how much you have to pay every month.
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.