The current average rate on 5-year adjustable-rate mortgages is 7.78%, according to data from the popular real estate marketplace Zillow. If you’re considering an ARM to buy a home, whether to call your own or as an investment property, read on—we’ll take a look at average rates for a couple ARM types, show you how ARMs work, and explain when such a loan might be worth considering even though fixed-rate mortgages are by far the more popular option.
You can see the previous business day’s ARM rates report here.
Check Out Our Daily Rates Reports
- Discover the highest high-yield savings rates, up to 5% for April 10, 2026.
- Discover the highest CD rates, up to 4.20% for April 10, 2026.
- Discover the top CD rates from major banks on April 10, 2026.
- Discover the current mortgage rates for April 10, 2026.
- Discover current refi mortgage rates report for April 10, 2026.
- Discover current ARM mortgage rates report for April 10, 2026.
- Discover the current price of gold for April 10, 2026.
- Discover the current price of silver for April 10, 2026.
Average ARM mortgage rates
Note that Fortune reviewed the most recent Zillow data available as of April 24.
Fixed-rate vs. adjustable-rate mortgages
Fixed-rate home loans represent roughly 92% of all U.S. mortgages—a testament to their reliability. Unlike ARMs, which allow interest rate changes after an initial period, fixed-rate loans guarantee one rate for the life of the mortgage. This predictability makes them appealing to many.
Still, ARMs may offer benefits in certain situations. After all, about 8% of borrowers opt for them over the more common fixed-rate loans.
When you might consider an adjustable-rate mortgage
Three types of buyers may favor ARMs:
- Short-term homeowners: If relocation is likely within a few years, ARMs may offer savings through low introductory rates while moving before future adjustments become a concern. But, weigh carefully if you’ll actually be able to move out of your starter home as quickly as you intend.
- Property investors: Investors may leverage ARMs for a low initial rate, then may flip the home before adjustment periods kick in or may increase rent during periods of higher interest rates if they’re renting out the property.
- Buyers facing elevated interest levels: During high-interest periods, ARMs might offer a lower rate during the introductory time frame and even the potential for rate reductions down the line 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 generally start with low fixed interest periods lasting three to 10 years before shifting into adjustment periods. During the adjustments, your rate will be influenced by factors including:
- Benchmark indices like SOFR: Your ARM will typically be tied to a benchmark, commonly SOFR. This rate reflects the cost for banks to borrow cash overnight. The U.S. Treasury publishes a new SOFR each morning.
- Margins added by lenders: Margins are fixed percentages, which can often range between 2% and 3.5%, added by lenders to whatever benchmark is used for your ARM. The benchmark plus the margin helps determine your mortgage rate. These can vary based on things like your specific lender and your credit profile.
- Rate caps: Adjustment caps limit how much your rate can increase during specific intervals or over the loan’s lifetime. These can include initial, subsequent, and lifetime caps.
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). Other structures 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
Sometimes, circumstances change. Maybe you bought a home intending to flip it, then realized it made a lot of sense to keep as your primary residence. Or maybe you bought a starter home and then realized you wouldn’t be moving as quickly as intended. In the latter case, you’re not alone. A large chunk of Millennial and Gen Z homeowners are sticking it out with their starter homes because they can’t afford to upgrade.
In such situations, it might make sense to refinance from an ARM to a fixed-rate mortgage. The process for doing this is much the same as refinancing from one fixed-rate loan to another. You’ll shop around with various lenders, submit the documents required for the application, and pay off your existing loan in full with the new one.
Pros and cons of adjustable-rate mortgages
As with any mortgage type, ARMs have benefits and drawbacks. Evaluate them carefully with a trusted loan officer to decide if this is the best type of mortgage for your situation. To get you started, a few key points are outlined below.
Pros:
- Potential for a lower introductory rate compared with fixed-rate loans.
- Chance for reduced monthly payments if the market improves and rates go down.
- Some borrowers might find qualifications less stringent on ARMs.
Cons:
- Monthly payments can increase significantly after the fixed period ends.
- Comparing offers is likely to be more complicated than with fixed-rate loans.
- There’s less predictability and stability compared to fixed-rate mortgages.
