ARM mortgage rates update for October 13, 2025

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

Average ARM mortgage rates

Note that Coins2Day reviewed the most recent Zillow data available as of Oct. 10.

Fixed-rate versus adjustable-rate mortgages

Approximately 92% of homeowners with loans opt for fixed-rate mortgages. Unlike adjustable-rate mortgages (ARMs), which can see their interest rates change after an initial period, a fixed-rate mortgage locks in your rate for the entire loan term. This stability clearly explains its widespread appeal.

Still, ARMs might be a good choice in specific circumstances. This means you could be part of the approximately 8% of homeowners who determine this loan type presents an advantage. 

When to get an ARM

Here are three categories of homebuyer for whom ARMs can be helpful:

• Buyers of temporary or “starter homes.” If you’re fairly confident you won’t be in your home for long, an ARM might be a strategic choice since you can take advantage of the low fixed-period interest rate and then sell the home before the adjustment period hits. 
• Investors. A lot of property investors favor ARMs for a comparable cause. They might lock in an attractive interest rate initially, and as the reset period nears in three, five, or seven years, they're able to modify the rent to match the updated mortgage cost or sell the asset and acquire another. 
• Buyers during periods of high interest rates. Finally, many buyers go out on a limb with an adjustable-rate mortgage during periods of high interest since it’s more likely to offer a lower rate upfront and on the back end, assuming things cool off by the time your fixed period expires.  

Adjustable-rate mortgages, or ARMs, are home loans where the interest rate can change over time.

ARMs typically start off with a low, fixed interest rate for a set period of time—such as three, five, seven or 10 years—and after the “fixed period” expires, the “adjustment period” begins. 

Things become more intriguing now. Throughout the adjustment phase, your ARM's interest rate might change depending on a few significant elements, such as: 

• Benchmark rates. ARMs typically derive their primary interest rate from a benchmark known as the Secured Overnight Financing Rate (SOFR). The U.S. Treasury publishes a new SOFR daily to inform banks and financial institutions “hey, here’s the cost of borrowing cash today.” This process assists lenders in establishing suitable market interest rates for a range of offerings, including vehicle financing and home loans. 
• Margins. The margin is a fixed percentage that your lender adds to the index to come up with your ARM interest rate. So if you have an ARM tied to the SOFR and the SOFR is 5% while your margin is 2%, your ARM rate will be 7%. Margins typically range between 2% and 3.5% and can vary based on the lender, loan and your creditworthiness. Margins are also set in stone as part of the loan agreement, so it’s best to shop around to see which lenders can offer more competitive margins. 
• Rate caps. Lastly, rate caps restrict the extent to which your rate can increase over the loan's duration. “Initial” caps govern the initial rate increase, “subsequent” caps determine subsequent increases, and “lifetime” caps set the overall limit for your interest rate's rise. 

A prevalent ARM structure is the 5/1, where the interest rate remains fixed for the initial five years. Following this period, the rate adjusts annually for the subsequent 25 years, as most ARMs span a 30-year duration. 

A frequent ARM option is the 10/6, which signifies a decade-long fixed rate followed by a two-decade adjustment phase where the interest rate is revised every half-year. You might also encounter 3/1, 7/1, and 10/1 ARMs. 

Learn more: Why the Secured Overnight Financing Rate might matter for your mortgage.

Switching from an adjustable-rate mortgage to a fixed-rate loan

Even when an ARM seemed like the best choice for purchasing your property, you might later decide a fixed-rate mortgage would have been a better long-term option. For example, you might conclude that your initial home purchase will actually be your forever home. If this is your scenario, you're not unique; a 2024 study indicated that a significant portion of Millennial and Gen Z homeowners are unable to afford an upgrade and are making do with their starter homes.

No matter the particular cause, be aware that refinancing from an adjustable-rate mortgage to a fixed-rate loan is an option. Actually, it's likely a rather frequent justification for those with ARMs to refinance.  

Switching from an adjustable-rate mortgage (ARM) to a fixed-rate loan is straightforward, functioning similarly to a fixed-to-fixed refinance. The process involves seeking offers from various lenders to secure optimal rates, submitting required paperwork, finalizing your new mortgage, and fully repaying your existing loan.

Advantages and disadvantages of variable-rate home loans

ARMs, much like other mortgage options, present both advantages and disadvantages. Although your lender will make the final determination regarding the most suitable mortgage for your situation, understanding the fundamental aspects can assist you in financial planning and managing the initial stages of the mortgage process.