ARM loan rates

Written by Zach Wichter

On , the national average 5/1 ARM APR is 5.640%. The average 10/1 ARM APR is 5.150%, according to Bankrate’s latest survey of the nation’s largest mortgage lenders.

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Today's 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 4.280% 5.640%
7/1 ARM 5.120% 5.110%
10/1 ARM 5.190% 5.150%

Top 5 Bankrate ARM lenders

  • Third Federal Savings and Loan Association
  • AimLoan.com
  • First Mortgage Direct
  • Watermark Home Loans
  • Ally Bank

Methodology

Bankrate helps thousands of borrowers find mortgage and refinance lenders every day. To determine the top mortgage lenders, we analyzed proprietary data across more than 150 lenders to assess which on our platform received the most inquiries within a three-month period. We then assigned superlatives based on factors such as fees, products offered, convenience and other criteria. These top lenders are updated regularly.

What is an ARM loan?

Adjustable-rate mortgages, or ARMs, are home loans that come with a floating interest rate. In other words, the interest rate can change periodically throughout the life of the loan, unlike fixed-rate mortgages. Since the rate on ARMs can change, your monthly payment may increase or decrease. ARMs are structured with a fixed-rate period and a floating-rate period. During the first few years your rate is fixed, but after that period ends your rate becomes adjustable. These are typically 5/1 or 7/1 ARMs, which signify that the first five or seven years of the loan will have a fixed rate.

The time between rate changes — called the adjustment period — will appear in the fine print, so you’ll know exactly when it may go up or down. Typically, ARM interest rates adjust annually after the initial fixed period.

How do adjustable-rate mortgages work?

Adjustable-rate mortgages are loans with an interest rate that changes after an initial fixed period. The most common adjustable-rate mortgage, the 5/1 ARM, has a fixed period of five years at the start of the loan, which usually has a lower interest rate relative to market conditions. After that initial period ends, the /1 represents that the rate will adjust based on the prevailing market rate annually.

Pros and cons of an ARM loan

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

Pros:

  • It has lower rates and payments early in the loan term
  • Borrowers may be able to qualify for a larger mortgage thanks to lower initial payments
  • Borrowers may be able to invest their monthly savings
  • It offers a cheaper way for borrowers who don’t plan on living in one place for very long to buy a house

Cons:

  • 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 borrowers need to be more active and savvy in managing their accounts

ARM loan FAQs

Learn more about adjustable-rate mortgages

Written by: Zach Wichter, mortgage reporter for Bankrate

Zach Wichter is a mortgage reporter at Bankrate. He previously worked on the Business desk at The New York Times where he won a Loeb Award for breaking news, and covered aviation for The Points Guy.

Read more from Zach Wichter

Learn more about specific loan type rates
Loan Type Purchase Rates Refinance Rates
The table above links out to loan-specific content to help you learn more about rates by loan type.
30-Year Loan 30-Year Mortgage Rates 30-Year Refinance Rates
20-Year Loan 20-Year Mortgage Rates 20-Year Refinance Rates
15-Year Loan 15-Year Mortgage Rates 15-Year Refinance Rates
10-Year Loan 10-Year Mortgage Rates 10-Year Refinance Rates
FHA Loan FHA Mortgage Rates FHA Refinance Rates
30-Year FHA Loan 30-Year FHA Loan Rates 30-Year FHA Refinance Rates
VA Loan VA Mortgage Rates VA Refinance Rates
ARM Loan ARM Mortgage Rates ARM Refinance Rates
3/1 ARM 3/1 ARM Rates 3/1 Refinance Rates
5/1 ARM 5/1 ARM Rates 5/1 Refinance Rates
7/1 ARM 7/1 ARM Rates 7/1 Refinance Rates
10/1 ARM 10/1 ARM Rates 10/1 Refinance Rates
Jumbo Loan Jumbo Mortgage Rates Jumbo Refinance Rates
30-Year Jumbo Loan 30-Year Jumbo Loan Rates 30-Year Jumbo Refinance Rates