The most recent publication concerning ARM mortgage rates for December 4, 2025 has been released.

Continue reading, and we'll detail ARM functionality, evaluate ARM suitability versus fixed-rate mortgages, and examine ARM interest rates from several leading lenders.

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

ARM mortgage rates from leading lenders

As of December 3rd, Coins2Day examined the latest available figures. The institutions have supplied these sample rates. Each is predicated on distinct assumptions concerning a hypothetical borrower's credit standing and geographic area. The estimates might incorporate an assumption of mortgage discount points. Should you decide to apply, be aware that the rate you are offered 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 home loans

In the United States, fixed-rate mortgages are the prevailing choice for homeowners, making up approximately 92% of all residential financing. In contrast to adjustable-rate mortgages (ARMs), where interest rates can fluctuate following an introductory phase, fixed-rate loans provide stability over their entire duration, which is a probable reason for their widespread adoption.

However, adjustable-rate mortgages might be beneficial in particular situations. Approximately 8% of individuals taking out loans opt for them due to their distinct advantages.

When you might think about a mortgage with a fluctuating interest rate

Three groups of homebuyers can commonly benefit from considering ARMs:

• Homeowners who intend to move soon: Should you anticipate relocating within a few years, possibly because this is an initial dwelling, an adjustable-rate mortgage might permit you to benefit from a reduced initial rate without concern for subsequent modifications.
• Real estate investors: Landlords buying a property to rent out or house flippers intending to sell a property quickly may use ARMs with the intent of adjusting the monthly rent if interest rates increase or selling before the adjustment period kicks in.
• Buyers in high-interest environments: When interest rates are high, ARMs might provide more favorable rates initially, with the possibility of better terms down the line should market conditions improve.

Understanding the mechanics of adjustable-rate mortgages

ARMs commence with an initial fixed interest rate, typically for a duration of three, five, seven, or 10 years, after which the loan enters its variable phases. The extent to which your rate fluctuates during an adjustment phase may be influenced by several elements, such as:

• Benchmarks like SOFR: An ARM's interest rate is generally linked to a standard, frequently SOFR. This specific benchmark indicates the expense for financial institutions to secure funds for a single day. The U.S. Treasury publishes an updated every morning. 
• Margins: Fixed margins are added by lenders on top of the benchmark to determine your ARM rate. These can often range between 2% to 3.5%.
• Caps: Adjustment limits restrict the extent to which rates can rise during particular periods or throughout the entire duration. You might encounter terms like initial adjustment limits, subsequent limits, and overall limits.

Typical ARM loan structures feature a 5/1 arrangement, which involves an initial fixed rate for five years before adjusting annually, and a 10/6 setup, offering a decade-long introductory phase with adjustments every six months. Additionally, you'll find other options available such as 3/1 ARMs, 7/1 ARMs, and 10/1 ARMs. 

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

Transitioning from an adjustable-rate mortgage to a loan with a set interest rate

Things occur. Circumstances shift. Should you find yourself remaining in your initial dwelling for an extended duration, and you originally secured an adjustable-rate mortgage, you may elect to refinance to a loan with a set interest rate.

Firstly, understand that you're not isolated. A significant portion of homeowners from The Millennial and Gen Z demographics are unable to finance improvements and are continuing on in their starter homes

The procedure for converting an adjustable-rate mortgage (ARM) to a fixed-rate mortgage closely mirrors that of refinancing from one fixed-rate loan to another. You'll compare offers from different financial institutions, submit the required application materials to demonstrate your creditworthiness and income align with the lender's criteria, and then utilize the new loan to completely settle your existing one. 

Advantages and disadvantages of variable-rate home loans

Consult a reliable loan professional to confirm you're choosing the most suitable mortgage product for your circumstances. To help you begin, consider these fundamental elements when assessing if an adjustable-rate mortgage (ARM) is a good fit for your situation.