5/1 ARM Rates: Today's Best Rates
Current adjustable-rate mortgage rates updated daily. Lower initial rates with a fixed period of 5 years before adjusting — ideal for short-term homeowners and strategic buyers.
What Is an Adjustable-Rate Mortgage (ARM)?
An adjustable-rate mortgage offers a lower fixed interest rate for an initial period (typically 3, 5, 7, or 10 years), then adjusts periodically based on a market index. The most popular is the 5/1 ARM — fixed for 5 years, then adjusting once per year.
Today's 5/1 ARM rate is 6.12%, compared to 6.33% for a 30-year fixed. That initial rate discount can save thousands during the fixed period.
How an ARM Works
ARM Types Compared
Understanding ARM Rate Caps
ARM rate caps protect you from extreme rate increases. Most ARMs use a 2/1/5 or 2/2/5 cap structure:
Pros and Cons of ARMs
Advantages
- Lower initial rate than fixed-rate mortgages
- Save thousands during the fixed period
- Ideal if you plan to move within 5-7 years
- Can refinance to fixed before adjustment
- Rate caps limit worst-case scenarios
- Popular for jumbo loans (bigger savings)
Considerations
- Payment uncertainty after fixed period
- Rate could increase significantly
- More complex than fixed-rate loans
- Not ideal for long-term homeowners
- Budget planning is harder post-adjustment
- Refinancing depends on future rates and equity
When Does an ARM Make Sense?
ARMs are a smart choice when you plan to sell or refinance before the fixed period ends, when you expect rates to decrease, when you're buying in a high-cost market where the rate savings are substantial, or when you're confident your income will grow to absorb potential increases. Military families with frequent PCS moves and professionals who relocate often are natural ARM candidates.
How to Get the Best ARM Rate
Compare ARM offers from multiple lenders — pay close attention to the margin (the amount added to the index after adjustment), not just the initial rate. A lower margin matters more long-term. Also check the index used (SOFR is standard now), the cap structure, and any prepayment penalties.
ARM FAQ
Today's 5/1 ARM rate is 6.12% from Optimal Blue daily data, compared to 6.33% for a 30-year fixed. The ARM discount can save you significantly during the initial fixed period.
The "5" means your rate is fixed for the first 5 years. The "1" means it adjusts once per year after that. Similarly, a 7/1 ARM is fixed for 7 years then adjusts annually, and a 5/6 ARM is fixed for 5 years then adjusts every 6 months.
Rate caps limit increases. A typical 2/1/5 cap means: max 2% increase at first adjustment, max 1% per year after, and max 5% total over the life of the loan. So if you start at 6%, your rate can never exceed 11%.
Yes, and many ARM borrowers plan to do exactly that. You can refinance into a fixed-rate mortgage any time before or after the adjustment period begins. Just make sure to factor in closing costs and current rates when deciding.
Most new ARMs use the Secured Overnight Financing Rate (SOFR), which replaced LIBOR in 2023. Your adjusted rate equals the SOFR index value plus the lender's margin (typically 2.5-3.0%). The margin stays constant for the life of the loan.
It depends on your timeline. A 5/1 ARM has a lower initial rate but gives you less time before adjustments. A 7/1 ARM costs slightly more initially but provides 2 extra years of rate certainty. Choose based on how long you plan to keep the loan.
ARMs can be smart when fixed rates are high and you expect rates to decline (allowing a future refi), when you plan to sell within the fixed period, or for jumbo loans where the ARM discount is often larger. Today's ARM rate of 6.12% vs. 6.33% fixed shows the potential savings.