5/1 ARM Mortgage Rates - NerdWallet

5/1 ARM Mortgage Rates

Find and compare the best mortgage rates for a 5/1 Adjustable Rate Mortgage.

Mortgage rate trends

  • 30 year fixed
  • 15 year fixed
  • 5/1 ARM
NerdWallet's mortgage rate insight
4.46%
30 year fixed
Thirty- and 15-year fixed mortgage rates closed out the week by rising five basis points each this morning, while 5/1 ARM rates fell by two basis points, according to a NerdWallet survey of mortgage rates published by national lenders on Friday.
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Current mortgage rates

Loan typeAverage
rate
Change
1 day
Change
1 year
30 year fixed4.46%
0.05%
0.67%
15 year fixed3.84%
0.05%
0.77%
5/1 ARM3.86%
0.02%
0.96%
Data source: NerdWallet Mortgage Rate Index

5/1 ARM Mortgage Rates

NerdWallet’s mortgage comparison tool can help you compare 5/1 ARMs and choose the one that works best for you. Just enter some information and you’ll get customized rate quotes chosen from hundreds of participating lenders. No need to give out any personal information or go through a credit check.

What is a 5/1 ARM?

A 5/1 ARM, or 5/1 adjustable rate mortgage, is a mortgage loan with an interest rate that’s fixed at a low, introductory level for a period of five years and then adjusts each year after that. The new, adjustable rate, which changes annually, is tied to an interest rate index that moves based on a variety of economic and financial market factors. After the introductory period, your interest rate will reset to the indexed rate and then go up if the index rises, and drop if it falls. If you don’t refinance, you’d pay off the loan in 30 years.

When should you consider a 5/1 ARM?

A 5/1 ARM makes sense if you plan to refinance your mortgage or sell your house before the introductory rate expires or if you expect the value of your house to rise quickly. If you choose an ARM, you’ll likely be able to qualify for a larger loan because of the low introductory rate. But be careful, your interest rate and monthly payment will increase after the introductory period, which can be 3, 5, 7 or even 10 years, and can climb substantially depending on the terms of your specific loan.

ARM glossary

  • Rate cap:
    The maximum amount your loan’s interest rate can increase for each designated period of time.
  • 2/2/5:
    Tells you the limits on just how high your interest rate can go. In this example, the initial rate increase can be no more than 2 percentage points. Each subsequent adjustment can be no higher than 2 percentage points — and the last digit represents the lifetime maximum rate increase your loan will allow. In this case, a 5 percentage point maximum.
  • Index margin:
    Your loan’s rate is based on an interest rate index plus some fixed percentage. For example, an index rate of 2.25% plus a margin of 1.50 percentage points would mean your interest rate would be 3.75%.

Learn more about adjustable-rate mortgages: