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Today's Best Mortgage Rates

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Homebuyers have a choice of fixed or adjustable-rate mortgages. A 5/1 ARM is one of the more popular types of adjustable-rate mortgages. With this loan type, rates are fixed for the first five years. Then, you can adjust annually.

5/1 ARM mortgage rates are often lower than the rates on fixed-rate loans. However, borrowers who choose this loan type take a risk that interest rates will go up and their loan payments will rise. Here are the current 5/1 ARM interest rates so you can see what you'd pay if you opt to take this risk.

How does a 5/1 ARM mortgage work?

A 5/1 ARM differs from a fixed-rate mortgage because the interest rate is only fixed for a limited time. For the first five years, you pay the rate you started with when you borrowed. After that, rates can change once annually.

When your interest rate adjusts, the new rate on a 5/1 ARM is determined by a financial index. This is called the benchmark index. The index used to adjust your rate will be disclosed to you up front. Often, the benchmark index is the Fed Funds Rate or the LIBOR index.

Adjustable-rate mortgages like a 5/1 ARM are usually repaid over 30 years. The time it takes to pay off your loan will never change. But the interest rate and payment due can change as the benchmark index does. If the rate rises, your monthly payment goes up. That’s because more money is needed to cover interest costs while paying down principal. Paying both ensures your loan is paid off on time.

When you take out a 5/1 ARM, your initial mortgage documents will indicate the maximum amount the rate can go up. Make sure your payment would still be affordable even if it went up by that amount.

How to compare 5/1 ARM mortgage rates

Most mortgage lenders offer adjustable-rate mortgages. Some of these include banks, online lenders, and credit unions. You should get quotes from multiple lenders. Look for the most affordable interest rate and the best overall loan terms.

Be sure to compare 5/1 ARMs only to other adjustable-rate mortgages with the same initial fixed-rate period. A 15-year or 30-year fixed-rate mortgage will likely have a higher interest rate. Remember that while you pay a lower starting rate with a 5/1 ARM, your payment could rise sooner than with a 7/1 ARM. And no adjustable-rate mortgage offers the predictability of a fixed-rate loan with a payment that never changes.

When comparing lenders, find out the terms that would apply if you borrow. Look for providers who do not require a hard credit check to get pre-qualified. Too many hard inquiries can reduce your credit score.

Be sure to compare more than just interest rates. Also look at total fees each lender charges, as well as qualifying requirements and possible penalties. The Annual Percentage Rate (APR) includes the cost of both fees and interest, so comparing APRs can be more accurate than comparing interest rates alone.

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Is a 5/1 ARM mortgage right for me?

There are benefits to a 5/1 adjustable-rate mortgage. Your rate usually starts lower than with a fixed-rate mortgage or an ARM with a longer initial fixed period. Because of this, your monthly mortgage payment is typically more affordable. This can make it possible to stretch to buy a home you might not otherwise qualify to buy.

However, you take a big risk by opting for an adjustable-rate mortgage. Your rate and payment could get higher. You're giving up the predictability a fixed-rate loan provides, and you could end up paying more in the long run. While many people plan to move or refinance before their rate adjusts, plans don't always come to fruition. If you're unable to relocate or qualify for a new loan, paying your bill could become a burden.

It's important to evaluate this major risk. Review your loan documents carefully and ensure you'd be able to afford your loan even if rates rise by the maximum allowed.

Refinancing with an adjustable-rate mortgage

Looking to refinance an adjustable-rate mortgage? Check out our guide to learn more about why you might want to refinance your adjustable-rate mortgage.

The Ascent's best mortgage lenders

If you want to uncover more about the best mortgage lenders for low rates and fees, our experts have created a shortlist of the top mortgage companies. Some of our experts have even used these lenders themselves to cut their costs.


  • A 5/1 arm is an adjustable rate mortgage where your interest rate is fixed for the first five years. After that, rates can change once annually.

  • You should look for the most affordable interest rate and the best overall loan terms by getting quotes from multiple lenders.

  • A 5/1 ARM may be a good option for you if are planning to move or refinance your mortgage before the interest rate adjusts.