For homebuyers comfortable with some unpredictability in pursuit of a potentially lower interest rate, an adjustable-rate mortgage could be a suitable choice. These are especially beneficial for those intending to rent out or quickly resell an investment property, or who anticipate relocating prior to the expiration of the loan's initial fixed-rate term.
TL;DR
- Latest ARM mortgage rates for October 20, 2025, are available from lenders like Bank of America, U.S. Bank, and Zillow Home Loans.
- ARMs offer a lower initial rate but can increase after the fixed period, making them suitable for short-term homeowners or investors.
- Fixed-rate mortgages are more common (92%) due to their predictable payments, while ARMs require a higher risk tolerance.
- ARM rates adjust based on benchmark indices like SOFR, lender margins, and rate caps, with common structures like 7/6 ARMs.
Continue reading as we explain ARM functionality, evaluate their suitability compared to standard fixed-rate mortgages, and examine ARM interest rates from several leading lenders.
You can see the previous business day’s ARM rates report here.
Check Out Our Daily Rates Reports
- Discover the highest high-yield savings rates, up to 5% for November 17, 2025.
- Discover the highest CD rates, up to 4.20% for November 17, 2025.
- Discover the current mortgage rates for November 17, 2025.
- Discover current refi mortgage rates report for November 17, 2025.
- Discover current ARM mortgage rates report for November 17, 2025.
- Discover the current price of gold for November 17, 2025.
- Discover the current price of silver for November 17, 2025.
Mortgage rates for ARM loans from leading lenders
Coins2Day examined the latest figures up to October 17. The institutions supplied these sample rates. Each rate is predicated on particular assumptions regarding a hypothetical borrower's credit standing and geographic area. The estimates might incorporate an assumption about mortgage discount points. Should you decide to proceed with an application, be aware that the actual rate you are offered could differ from the sample rates presented.
| Bank of America 7/6 ARM | U.S. Bank 7/6 ARM | Zillow Home Loans 7/6 ARM | |
|---|---|---|---|
| Interest Rate | 5.625% | 5.750% | 5.875% |
| APR | 6.456% | 6.524% | 6.530% |
| Interest Rate | |
|---|---|
| Bank of America 7/6 ARM | 5.625% |
| U.S. Bank 7/6 ARM | 5.750% |
| Zillow Home Loans 7/6 ARM | 5.875% |
| APR | |
| Bank of America 7/6 ARM | 6.456% |
| U.S. Bank 7/6 ARM | 6.524% |
| Zillow Home Loans 7/6 ARM | 6.530% |
A 7/6 ARM features a fixed interest rate for the initial seven years, followed by adjustments every six months thereafter.
Fixed-rate versus adjustable-rate mortgages
Approximately 92% of all U.S. Household mortgages are fixed-rate loans. A fixed-rate mortgage ensures an unchanging rate throughout the loan's duration, contrasting with ARMs, whose interest rates may fluctuate after an initial set period. This predictability makes them highly attractive.
Still, ARMs can be a sensible choice in certain circumstances. Approximately 8% of individuals opt for these loans due to their perceived distinct benefits.
When to get an ARM
Three types of buyers often find ARMs beneficial:
- Starter home buyers: If you plan to move within a few years, an ARM may let you capitalize on a low initial rate without having to worry about future adjustments, as you intend to sell the home before the fixed period ends.
- Investors: Real estate investors who intend to flip a house or rent it out may use ARMs to minimize upfront costs, then sell the property or adjust the rent amount when rates change.
- Buyers facing high-interest markets: During periods of elevated interest rates, ARMs might offer lower upfront costs and may even provide relief later if market conditions improve.
Adjustable-rate mortgages (ARMs) function in a specific way.
Adjustable-rate mortgages (ARMs) commonly offer a low, fixed interest rate for a set duration—often three, five, seven, or ten years—before transitioning to variable periods. The elements influencing ARM rates when they adjust are:
- The Benchmark indices: ARM rates frequently correlate with benchmarks such as the SOFR. The U.S. Treasury publishes an updated SOFR daily, mirroring the overnight expenses banks incur for obtaining funds.
- Margins: Lenders add margins (fixed percentages) to benchmarks when calculating your ARM’s final rate. These can often range from 2% to 3.5%.
- Caps: Rate caps limit increases during specific intervals or throughout the loan term (e.g., initial adjustment caps, subsequent caps).
Typically, ARMs are structured as 30-year mortgages. Common ARM configurations are the 5/1 and 10/6 models, which signify a set interest rate for five years followed by yearly changes, and a set rate for 10 years with adjustments occurring every six months, respectively. Other options include 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
If your plans change, you can likely decide to refinance into a fixed-rate mortgage. For instance, say you decide to stay in your home longer than you initially thought you would.
Many Millennial and Gen Z homeowners are in a similar predicament, unable to afford upgrades and facing getting by with their starter homes.
Similar to how one might refinance a fixed-rate mortgage for a better interest rate or to access home equity, switching from an adjustable-rate mortgage (ARM) to a fixed-rate loan requires comparing offers from various lenders, submitting paperwork to verify eligibility, and settling your current mortgage balance.
Advantages and disadvantages of variable-rate home loans
Adjustable-rate mortgages (ARMs) have both advantages and disadvantages that you ought to consider prior to seeking this kind of home loan. Furthermore, collaborating with a reliable loan officer can assist you in deciding if an ARM is truly the most suitable mortgage option for your situation. Below are some fundamental points to contemplate.
Pros
- Chance for a lower rate at first. An ARM might present a lower interest rate compared to a fixed-rate mortgage during its initial fixed term.
- Potential for easier qualification. Some borrowers may find they’re more likely to qualify for an adjustable-rate mortgage than for a fixed-rate loan.
- Possible savings down the road. This is not guaranteed, but if market rates decrease during adjustment periods, your monthly payment might go down accordingly.
Cons
- Possibility for payments to rise. Keep in mind that the time it takes for adjustments to occur relies on market conditions. While your rate and subsequent monthly payment might decrease, the opposite scenario is also possible.
- Hard to comparison shop. It's harder to compare rates for an ARM than for standard fixed-rate mortgages because of the complex terminology involved.
- Less predictability. Once you take out a fixed-rate mortgage, you’re locked into that rate as long as you have the loan. This can give you a little more stability in terms of monthly payment (though you may still face changes to things like homeowners insurance or your HOA dues). With ARMs, you need a certain level of risk tolerance.