The most recent publication concerning ARM mortgage rates for December 9, 2025 has been released.

Continue reading, and we'll detail what an ARM entails, assess situations where an ARM might be preferable to a fixed-rate mortgage, and examine ARM interest rates from several leading financial institutions.

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

Average ARM mortgage rates

As of December 8th, Coins2Day examined the latest figures. The institutions' provided rates are examples. Each is founded on particular assumptions concerning a hypothetical borrower's credit standing and geographic area. Projections might incorporate an assumption of mortgage discount points. Should you decide to proceed with an application, 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

Close to 92% of homeowners with loans select fixed-rate housing financing. In contrast to variable-rate mortgages (ARMs), where interest rates can fluctuate following an initial set period, fixed-rate mortgages preserve the identical interest rate for the entire duration of the loan. This predictability understandably makes them a favored option.

Nevertheless, Adjustable-Rate Mortgages offer benefits in particular situations. Indeed, you could be part of the 8 percent of homeowners who view this loan category as a chance.

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

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

• Short-term/starter home buyers: Should you be certain that you won't remain in your residence for an extended duration, a variable-rate mortgage might prove to be a prudent selection. You could potentially benefit from the initial reduced fixed rate and divest the property prior to the commencement of the repricing period.
• Real estate investors: ARMs attract investors for reasons comparable to those mentioned previously. These purchasers might obtain a reduced initial interest rate, then divest the property prior to the repricing phase commencing 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.

Understanding the mechanics of adjustable-rate mortgages

Adjustable-rate mortgages (ARMs) initially feature a stable interest rate for a specified term, typically three, five, seven, or 10 years, after which they enter a period of fluctuation. Throughout this adjustment phase, various elements affect how the rate is modified. These elements comprise:

• Benchmark rates: Numerous adjustable-rate mortgages (ARMs) determine their interest rates by referencing benchmarks such as the Secured Overnight Financing Rate (SOFR), which indicates the expense banks incur when obtaining funds. The U.S. Treasury publishes a new SOFR each day.
• 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: Limits are in place to restrict the extent to which your interest rate can rise during certain times or throughout the entire duration of the loan. These restrictions encompass initial adjustment limits, subsequent limits, and overall lifetime limits.

Adjustable-rate mortgages (ARMs) commonly feature 30-year durations. Popular ARM configurations consist of the 5/1 ARM, which offers a five-year fixed period followed by yearly rate changes, and the 10/6 ARM, providing a decade of fixed rates before adjustments occur semi-annually. Other available 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.

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

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. 

Numerous homeowners from The Millennial and Gen Z demographics find themselves unable to finance necessary upgrades, and are making do with their starter homes. Therefore, be aware that you're not isolated if your financial calculations lead you to conclude that remaining in your current residence is the prudent course of action until market conditions become more favorable.

Transitioning from an adjustable-rate mortgage (ARM) to a loan with a fixed interest rate involves a procedure quite similar to switching from one fixed-rate loan to another. This entails comparing interest rates offered by different financial institutions, submitting necessary paperwork, finalizing the agreement for your new mortgage, and settling the outstanding balance on your existing loan.

Should your situation evolve, prompting a longer stay in your residence, you possess the option to convert your adjustable-rate mortgage (ARM) into a fixed-rate instrument. This refinancing procedure closely mirrors that of other home loan types: compare interest rates, submit necessary paperwork, finalize your new loan agreement, and settle your existing obligation.

Advantages and disadvantages of variable-rate home loans

Similar to other mortgage options, adjustable-rate mortgages (ARMs) come with both advantages and disadvantages. Consulting with a reliable loan professional can assist you in selecting the most suitable home loan for your circumstances. Nevertheless, here are some fundamental points to consider as you begin this process.