Adjustable-rate mortgage refinance rates

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Today’s ARM refinance 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.

Product Interest Rate APR
5/1 ARM 2.760% 4.070%
7/1 ARM 2.870% 3.980%
10/1 ARM 3.090% 4.040%

What is an adjustable-rate mortgage refinance loan?

In today’s historic frenzy of mortgage refinancing, homeowners are swapping out old loans for new ones at low fixed rates. It is possible to refi into an adjustable-rate mortgage, or ARM. The rate on an ARM changes over time. For a seven-year ARM, for instance, the introductory rate stays the same for seven years. Then the rate can adjust annually. The standard terms allow the rate on an ARM to rise as much as 2 percentage points at a time.

Should I get a fixed-rate refinance loan or an ARM refinance loan?

ARMs are a smart choice when mortgage rates are high and expected to drop. But with fixed rates at record lows as of September 2020, ARMs aren’t a popular option. That’s shown by the tiny share of borrowers taking ARMs — they make up less than 3 percent of loan applications. Mortgage experts say the savvy move now is to refinance out of an ARM and into a fixed-rate mortgage.

ARM refinance pros and cons

In normal times, the advantage of an ARM is that it carries a lower rate than a fixed-rate loan. However, these aren’t normal times — and ARM rates are more expensive than fixed-rate loans. The disadvantage of an ARM is that the rate can rise over time.

Written by
Jeff Ostrowski
Senior mortgage reporter
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.
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