What are ARM rates today?

As of March 2026, 5/1 ARM rates average 5.75-6.25%, about 0.75-1.0% lower than 30-year fixed rates. The initial rate is fixed for 5 years, then adjusts annually.

Is an ARM a good idea in 2026?

ARMs can save money if you plan to sell or refinance within the fixed period (5-10 years). However, if rates rise significantly, your payment could increase substantially after adjustment.

ARM Rates Today (March 2026): Adjustable Rate Mortgage Rates

Compare current adjustable-rate mortgage rates and understand if an ARM is right for your situation.

Current ARM Rates

Rates as of March 2026. Updated daily.

ARM Type	Initial Rate	APR	Margin	Index
5/1 ARM	5.875%	6.75%	2.75%	SOFR
7/1 ARM	6.125%	6.68%	2.75%	SOFR
10/1 ARM	6.375%	6.62%	2.75%	SOFR
5/6 ARM	5.750%	6.85%	2.75%	SOFR
7/6 ARM	6.000%	6.72%	2.75%	SOFR

ARM vs Fixed Rate Comparison

Loan Type	Rate	Monthly Payment*	5-Year Cost
30-Year Fixed	6.875%	$2,101	$126,060
5/1 ARM	5.875%	$1,895	$113,700
7/1 ARM	6.125%	$1,943	$116,580
10/1 ARM	6.375%	$1,996	$119,760

*Based on $320,000 loan

5/1 ARM Savings: $206/month = $12,360 over 5 years

How ARMs Work

ARM Terminology

Term	Meaning
5/1	Fixed for 5 years, adjusts every 1 year after
7/1	Fixed for 7 years, adjusts every 1 year after
10/1	Fixed for 10 years, adjusts every 1 year after
5/6	Fixed for 5 years, adjusts every 6 months after
Margin	Amount added to index to determine rate
Index	Benchmark rate (usually SOFR)
Cap	Limits on rate increases

Rate Adjustment Caps

Cap Type	Typical Limit
Initial adjustment	2-5%
Subsequent adjustments	2% per period
Lifetime cap	5-6% above initial rate

Example: 5/1 ARM Rate Adjustments

Initial rate: 5.875%

Year	Possible Rate	Monthly Payment*
1-5	5.875% (fixed)	$1,895
6	7.875% (max first adj)	$2,333
7	9.875% (max +2%)	$2,786
8+	11.875% (lifetime cap)	$3,252

$320K loan. Worst-case scenario if rates rise maximally

When ARMs Make Sense

Good Candidates for ARMs

Situation	Why ARM Works
Moving within 5-7 years	Sell before adjustment
Expecting income increase	Can handle higher payment later
Plan to refinance	Reset before adjustment
Rates likely to fall	May adjust downward
Large loan (higher savings)	More dollars saved monthly

When to Choose Fixed Instead

Situation	Why Fixed Works
Staying long-term	Predictable payments forever
Tight budget	Can’t risk payment increase
Near retirement	Need stable expenses
Rate difference small	Limited savings not worth risk
Uncertain plans	Fixed offers flexibility

Potential Savings Calculator

Conservative Scenario (Hold 5 Years, Sell)

$400,000 loan:

Loan Type	Monthly Payment	5-Year Total
30-Year Fixed (6.875%)	$2,626	$157,560
5/1 ARM (5.875%)	$2,369	$142,140
Savings	$257/month	$15,420

Risk Scenario (Keep Loan, Rates Rise)

Same $400,000 loan, ARM adjusts upward:

Year	ARM Payment	Fixed Payment	Difference
1-5	$2,369	$2,626	Save $257
6	$2,916	$2,626	Pay $290 more
7+	$3,214+	$2,626	Pay $588+ more

Break-even: ~6.5 years if rates rise to caps

ARM Types Compared

Conforming ARMs

Type	Best For
5/1 ARM	Selling/refinancing within 5 years
7/1 ARM	Moderate timeline, balanced risk
10/1 ARM	Longer horizon, minimal premium vs fixed

Jumbo ARMs

Type	Rate	Best For
Jumbo 5/1	6.125%	High-value, short hold
Jumbo 7/1	6.250%	Luxury homes, medium term
Jumbo 10/1	6.500%	Large loans, lower risk

ARM Index: Understanding SOFR

Most ARMs now use SOFR (Secured Overnight Financing Rate):

Feature	Details
What it is	Benchmark based on Treasury repo market
Current SOFR	~4.85%
Replaces	LIBOR (phased out)
Your rate formula	SOFR + Margin (e.g., 4.85% + 2.75% = 7.60%)

SOFR History

Date	SOFR Rate
March 2026	4.85%
March 2025	5.05%
March 2024	5.35%
March 2023	4.55%
March 2022	0.05%

Payment Examples by ARM Type

$350,000 home, 20% down ($280,000 loan):

ARM Type	Initial Rate	Initial Payment	Max Payment (if caps hit)
5/1 ARM	5.875%	$1,657	$2,588 (11.875%)
7/1 ARM	6.125%	$1,700	$2,588 (12.125%)
10/1 ARM	6.375%	$1,746	$2,588 (12.375%)
30-Year Fixed	6.875%	$1,838	$1,838 (same)

ARM Refinance Strategy

Many ARM borrowers plan to refinance before adjustment:

Strategy	Timing	Consideration
Refi to fixed	Before first adjustment	Lock in rate certainty
Refi to new ARM	Before adjustment	Reset clock, new low rate
Sell home	Before adjustment	Avoid adjustment entirely
Ride it out	If rates fall	Payment may decrease

Refinance Costs to Consider

Cost	Amount
Closing costs	2-3% of loan
Time to break even	2-4 years
Rate environment	May be higher/lower

Historical ARM Performance

Period	5/1 ARM vs 30-Year Fixed
2020s Average	ARM 0.75-1.0% lower
2010s Average	ARM 0.50-0.75% lower
2000s Average	ARM 1.0-1.5% lower

Historical note: ARM borrowers who refinanced or sold within the fixed period generally came out ahead. Those who held through rising rate adjustments sometimes paid more.

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