ARM mortgage rates as of October 7, 2025

You can see the previous business day’s ARM rates report here.

Average ARM mortgage rates

Fortune examined the newest Zillow figures, which were current as of October 6th.

Fixed-rate vs. adjustable-rate mortgages

Nearly all homeowners with a mortgage, around 92%, select fixed-rate loan options. Fixed-rate mortgages, in contrast to adjustable-rate mortgages (ARMs) whose interest rates can fluctuate after an initial set period, keep their A fixed rate of interest for the entire duration of the loan. Their reliability understandably makes them a favored option.

However, ARMs offer benefits in specific situations. It’s possible you're one of the 8% of homeowners who view this kind of mortgage as a chance for advantage.

Situations where an adjustable-rate mortgage might be advantageous

Consider an ARM if you fall into one of these three homebuyer categories:

• If you're sure you won'be in your home for an extended period, considering an ARM could be a smart move. You can probably benefit from the reduced fixed-rate period and divest before the adjustment phase commences.
• ARMs are attractive to investors for the same reasons as outlined previously. These purchasers can lock in an initial low interest rate and then sell the property before the rate adjustment period begins or modify the monthly rental cost if the rate i Enhancements.
• Consumers might opt for ARMs during periods of elevated interest rates, as these mortgages can occasionally present more favorable starting rates and possibly even subsequent rate reductions. Could see improvement if economic conditions get better.

How adjustable-rate mortgages work

Adjustable-rate mortgages (ARMs) start with a consistent interest rate for a defined period, typically three, five, seven, or 10 years, after which the rate becomes variable. During the adjustment period, various elements impact how rates are modified. Here are some of them:ems that include:

• A number of adjustable-rate mortgages (ARMs) utilize benchmarks such as the Secured Overnight Financing Rate (SOFR) to establish their interest rates, a rate that mirrors the expenses incurred by financial institutions. For obtaining a loan. The United States The Treasury Department releases its figures each day.
• Your ARM's interest rate is determined by adding a set margin to the benchmark rate by lenders. Typically, margins fall between 2% and 3.5%, though these will naturally fluctuate depending on elements such as the loan itself, the financial institution providing it, and your credit standing. 
• Caps restrict the extent to which your interest rate can rise within defined timeframes or throughout the entire duration of the loan. These consist of initial and ongoing adjustment limits, as well as a comprehensive lifetime cap.

ARMs commonly feature 30-year periods. ARM loan structures frequently feature options like the 5/1 ARM, which has a fixed rate for five years followed by annual adjustments, and the 10/6 ARM, offering a decade of fixed rates before semiannual adjustments. This concludes the section. Additionally, there are mortgage products like 3/1, 7/1, and 10/1 Adjustable-Rate Mortgages. 

Learn more: How the Secured Overnight Financing Rate could impact your mortgage payments.

Refinancing from an ARM to a fixed-rate mortgage

Should your situation evolve after securing an Adjustable-Rate Mortgage (ARM), for instance, if you opt to remain in your home for a longer duration than initially planned, it could prove advantageous to O refinance into a loan with a fixed interest rate. 

Many homeowners from the Millennial and Gen Z generations lack the financial means for renovations and are making do with their starter homes. If your calculations indicate that remaining in your current situation until the market rebounds is the most astute decision, rest assured that you are not isolated in this assessment.

Refinancing an adjustable-rate mortgage (ARM) into a fixed-rate mortgage follows a process similar to refinancing from one fixed-rate loan to another fixed-rate loan. You will compare rates from different lenders, submit necessary paperwork, finalize your new loan agreement, and then settle your existing debt.

Should your situation evolve, like choosing to remain in your residence for an extended period, you possess the option to transition from an adjustable-rate mortgage to a fixed-rate loan through refinancing. The procedure resembles refinancing other kinds of mortgages: compare interest rates, submit necessary paperwork, finalize your new loan agreement, and then settle your existing debt.

Pros and cons of adjustable-rate mortgages

ARMs, like all mortgage options, come with both advantages and disadvantages. A dependable loan officer can assist you in selecting the most suitable mortgage for your requirements. However, there are a few fundamental points you should keep in mind as you begin this endeavor.