Rates Indicator
5/1 Adjustable-Rate Mortgage (ARM)
Updated 2026-04-03 · Weekly · Source: Freddie Mac · Next release: 2026-04-10
Historical Trend
| Date | Value |
|---|---|
| 2026-04-03 | 6.2% |
| 2026-03-27 | 6.2% |
| 2026-03-06 | 6.2% |
| 2026-02-06 | 6.4% |
| 2026-01-30 | 6.5% |
| 2026-01-02 | 6.5% |
| 2025-12-05 | 6.3% |
| 2025-11-06 | 6.4% |
| 2025-10-02 | 5.6% |
What This Means for Business
At 6.17%, the 5/1 ARM offers a modest discount to the 30-year fixed rate of 6.64%. When this spread is narrow (under 0.5%), the risk-reward of choosing an ARM is less compelling — you take on rate adjustment risk for relatively little savings. A wider spread (1%+) makes ARMs more attractive. For real estate investors and corporate relocation programs, ARMs can reduce carrying costs on properties held for short periods.
About 5/1 ARM
The 5/1 adjustable-rate mortgage (ARM) offers a fixed rate for the first 5 years, then adjusts annually based on a benchmark index plus a margin. ARMs typically start with a lower rate than 30-year fixed mortgages, making them attractive for buyers who plan to sell or refinance within 5-7 years.
Methodology
Freddie Mac surveys lenders weekly. The 5/1 ARM rate reflects the initial fixed-rate period offered to well-qualified borrowers. After the 5-year fixed period, the rate adjusts annually based on the Secured Overnight Financing Rate (SOFR) index plus a lender margin, subject to periodic and lifetime caps.
Related Indicators
Frequently Asked Questions
What happens when a 5/1 ARM adjusts?
After the initial 5-year fixed period, the rate adjusts once per year based on the SOFR index plus a margin (typically 2.75%). Most ARMs have caps: a 2% cap on the first adjustment, a 2% cap on each subsequent annual adjustment, and a 5% lifetime cap above the initial rate. So if your initial rate is 6.17%, the rate can never exceed 11.17% over the life of the loan.
When does a 5/1 ARM make sense?
A 5/1 ARM makes sense when you plan to sell or refinance within 5-7 years, when the rate spread between the ARM and 30-year fixed is large (1%+), or when you expect interest rates to decline and want the ARM to adjust downward. Corporate relocations, military families, and real estate investors are common ARM users. If you plan to stay in the home long-term, a fixed-rate mortgage provides more certainty.