Current ARM mortgage rates report for May 22, 2025

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

Average ARM mortgage rates

Note that Fortune reviewed the most recent Zillow data available as of May 21.

Fixed-rate vs. adjustable-rate mortgages

Fixed-rate mortgages dominate U.S. households, comprising about 92% of all home loans. Unlike adjustable-rate mortgages (ARMs), which allow interest rates to change after an initial period, fixed-rate loans offer consistency throughout their term—which likely explains their popularity.

That said, ARMs can be advantageous under specific circumstances. Around 8% of borrowers choose them for their unique benefits.

When you might consider an adjustable-rate mortgage

Three groups of homebuyers can commonly benefit from considering ARMs:

• Homeowners who intend to move soon: If you’re confident you’ll be moving in a few years, perhaps because this is a starter home, an ARM may let you enjoy a low introductory rate without worrying about future adjustments.
• 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: During times of elevated interest rates, ARMs can sometimes offer lower rates during the introductory period, and the potential for relief later if market conditions improve.

Pro tip
Saving up for a down payment? Make sure you have a high-yield savings account.

How adjustable-rate mortgages work

ARMs begin with an introductory fixed rate that often lasts three, five, seven, or 10 years before the loan transitions into its adjustment periods. How much your rate changes during an adjustment period can depend on a variety of factors, including:

• Benchmarks like SOFR: An ARM’s rate is typically tied to a benchmark, commonly SOFR. This particular benchmark reflects the cost for banks to borrow money overnight. The U.S. Treasury publishes an updated each 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 caps limit how much rates can increase at specific intervals or over time. You may hear about initial adjustment caps, subsequent caps, and lifetime caps.

Common ARM formats include 5/1 (an introductory rate that lasts for five years followed by annual adjustments) and 10/6 (a 10-year intro period followed by adjustments every six months) structures. Other structures on the market include 3/1 ARMs, 7/1 ARMs and 10/1 ARMs. 

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

Refinancing from an ARM to a fixed-rate mortgage

Life happens. Plans change. If it turns out you’re going to be in your starter home longer than expected, and you initially took out an ARM, you might opt to refinance to a fixed-rate loan.

First, know you’re not alone. A large chunk of Millennial and Gen Z homeowners can’t afford to upgrade and are continuing on in their starter homes

To refinance from an ARM to a fixed-rate mortgage, the process is more or less the same as refinancing from one fixed-rate loan to another. You’ll shop around with various lenders, provide the application documents necessary to show your credit profile and income meet the lender’s requirements, and you’ll use the new loan to pay your old one off in full. 

Pros and cons of adjustable-rate mortgages

Work with a trusted loan officer to ensure you’re selecting the best mortgage type for your needs. To get you started, here are some basic factors to consider in evaluating if an ARM is right for you.

Pros:

• Possibly lower initial rate compared with fixed-rate loans.
• Potentially easier qualification standards for some borrowers. 
• Chance to save if market conditions improve and rates go down.

Cons:

• Payments could spike after adjustments begin.
• Comparing offers is more complex than with common fixed-rate loans.
• Homeowners face more unpredictability than with a fixed-rate loan.