Current ARM mortgage rates report for Jan. 6, 2026

Keep reading and we’ll explain what’s involved with an ARM, evaluate when you might want to consider an ARM instead of a fixed-rate mortgage, and look at ARM rates from a few top lenders.

You can see the previous ARM rates report here.

Average ARM mortgage rates

Fortune reviewed the most recent data available as of Jan. 5. These are sample rates provided by the institutions. Each one is based off specific assumptions about a hypothetical borrower’s credit profile and location. Estimates may include an assumption of mortgage discount points. If you choose to apply, know that the rate you receive may vary from the sample rates shown here.

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

Fixed-rate vs. adjustable-rate mortgages

Approximately 92% of households with mortgages opt for fixed-rate home loans. Unlike adjustable-rate mortgages (ARMs), which feature interest rates that may change after an initial fixed period, fixed-rate mortgages maintain the same interest rate throughout the loan’s term. It’s no surprise that this stability makes them a popular choice.

Still, ARMs can be advantageous in certain scenarios. In fact, you might find yourself among the 8% of mortgage holders who see this type of loan as an opportunity.

When you might consider an adjustable-rate mortgage

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

• Short-term/starter home buyers: If you’re confident you won’t stay in your home long-term, an ARM can be a strategic choice. You can likely enjoy the lower fixed-period rate and sell the property before the adjustment phase begins.
• Real estate investors: ARMs appeal to investors for similar reasons as in the point above. These buyers may secure a low initial rate, then sell the property before the adjustment period starts or adjust the monthly rent amount if the rate increases.
• 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.

How adjustable-rate mortgages work

ARMs begin with a fixed interest rate for a set duration—commonly three, five, seven, or 10 years—before transitioning into an adjustment period. During the adjustment phase, several factors influence rate changes. These include:

• 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.

It’s typical for ARMs to have 30-year terms. Common ARM structures include the 5/1 ARM (five years fixed, then annual adjustments) and the 10/6 ARM (10 years fixed, then adjustments every six months). There are also structures 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.

Refinancing from an ARM to a fixed-rate mortgage

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. 

For example, many Millennial and Gen Z homeowners can’t afford to upgrade and are making do with their starter homes. So, know that you’re not alone if you crunch the numbers and determine the smart move is staying put until the market improves.

The process of refinancing from an ARM to a fixed-rate mortgage is much the same as refinancing from a fixed-rate loan to another fixed-rate loan. You’ll shop rates at various lenders, provide documentation, close on your new loan, and pay off the old one.

If circumstances change—such as deciding to stay in your home longer—you can refinance from an ARM to a fixed-rate loan. This process is similar to refinancing other mortgage types: shop rates, provide documentation, close on your new loan, and pay off the old one.

Pros and cons of adjustable-rate mortgages

As with any mortgage type, ARMs have their benefits and their drawbacks. Working with a trusted loan officer can help you settle on the right mortgage for your needs. But, here are some basics to be aware of as you start your journey.