ARM rates Nov 25, 2025

Continue reading for an explanation of ARMs, an evaluation of when an ARM might be preferable to a fixed-rate mortgage, and a look at ARM rates from several leading lenders.

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

Average ARM mortgage rates

As of November 24th, Coins2Day examined the latest available figures. The institutions supplied these sample rates, each predicated on distinct assumptions concerning a hypothetical borrower's credit standing and geographic area. These estimates might incorporate an assumption for mortgage discount points. Should you decide to apply, be aware that the actual rate you secure could differ from the sample rates presented.

A 7/6 ARM is one with a fixed rate for seven years, then adjustment periods every six months.

Fixed-rate versus adjustable-rate mortgages

Around 92% of homeowners with loans choose fixed-rate mortgages. These loans, unlike adjustable-rate mortgages (ARMs) where rates can fluctuate after an initial period, keep the same interest rate for the entire duration of the loan. This predictability is why they're so widely favored.

However, ARMs offer benefits in specific situations. It's possible you're part of the 8% of homeowners who view this loan type as a favorable option.

When to get an ARM

Here are three groups of homebuyers who might benefit from considering an ARM:

• Short-term/starter home buyers: For those certain they won't remain in their home indefinitely, an ARM presents a smart option. You might benefit from the initial lower fixed rate and move on before the rate changes commence.
• Real estate investors: ARMs attract investors for reasons akin to those mentioned previously. These purchasers might obtain a low introductory rate, then divest the property before the repricing phase commences or modify the monthly rental charge should the rate escalate.
• Buyers during high-interest-rate periods: Buyers may turn to ARMs when rates are high, as these loans can sometimes offer lower initial rates and potentially even reduced rates later if economic conditions improve.

Adjustable-rate mortgages (ARMs) function in a specific way.

Adjustable-rate mortgages (ARMs) start with a set interest rate for a specific term, typically three, five, seven, or ten years, after which they enter a period of adjustments. During this adjustment phase, various elements affect how the rate changes, such as:

• Benchmark rates: Many ARMs base their rates on benchmarks like the Secured Overnight Financing Rate (SOFR), which reflects the cost banks themselves face for borrowing cash. The U.S. Treasury publishes a new SOFR daily.
• Margins: Lenders add a fixed margin to the benchmark rate to calculate your ARM’s interest rate. Margins typically range from 2% to 3.5%, but of course will vary based on factors like the loan, the lender, and your creditworthiness. 
• Rate caps: Caps limit how much your rate can increase during specific periods or over the loan’s lifetime. These include initial adjustment caps, subsequent caps, and lifetime caps.

ARMs commonly feature 30-year durations. Popular ARM configurations are the 5/1 ARM, which offers five years of fixed rates followed by yearly changes, and the 10/6 ARM, providing 10 years of fixed rates before adjustments occur every six months. Other configurations include 3/1 ARMs, 7/1 ARMs, 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 circumstances change after you take out an ARM, such as if you decide you’re going to stay in the home longer than expected, it may be beneficial to refinance to a fixed-rate loan. 

A significant number of homeowners from The Millennial and Gen Z generations find themselves unable to finance upgrades and are making do with their starter homes. Therefore, understand that you're not isolated if your financial calculations lead you to conclude that remaining in your current home is the sensible decision until market conditions become more favorable.

Refinancing an adjustable-rate mortgage (ARM) into a fixed-rate mortgage follows a similar procedure to refinancing from one fixed-rate loan to another. This involves comparing interest rates from different lenders, submitting necessary paperwork, finalizing the new loan agreement, and settling the existing debt.

Should your situation evolve, like opting to remain in your residence for an extended duration, you possess the option to convert your adjustable-rate mortgage (ARM) into a fixed-rate loan through refinancing. This procedure mirrors that of refinancing other mortgage classifications: compare interest rates, submit necessary paperwork, finalize your new loan agreement, and settle your existing debt.

Advantages and disadvantages of variable-rate home loans

Just like any other mortgage, ARMs come with both advantages and disadvantages. Partnering with a reliable loan officer can assist you in selecting the ideal mortgage for your specific requirements. However, here are some fundamental points to consider as you embark on this process.