A 10/1 adjustable-rate mortgage (ARM) is a type of 30-year mortgage. Your initial interest rate is fixed for 10 years, and then it will change once a year for the rest of the loan term.

Most consumers already transitioned from LIBOR without realizing it. Financial institutions started converting adjustable-rate mortgages and student loans to SOFR in 2021.

In March 2025, the start rate for a 5/1 was about 6% for strong borrowers and about 6.35% for 30-year fixed loans. If the yield curve continues to normalize, this spread could widen even more.

Adjustable-rate mortgages, or ARMs, can save you money when their starting rates are lower than fixed mortgages. In atypical economic conditions, ARM rates can be higher than fixed rates. When ...

The share of borrowers applying for adjustable-rate mortgages has increased to its highest level since November 2023. ARMs often come with lower interest rates than fixed-rate loans. But they're ...

Adjustable-rate mortgages were a risk that hundreds of thousands of people took in 2019 just before the Coronavirus pandemic when the U.S. saw the lowest 30-year mortgage rates in history.

While the average fixed-rate mortgage stands at 7.29%, the average adjustable rate is 6.6%. But it can be much riskier.

According to data from Intercontinental Exchange, a global provider of technology and data, 1.7 million homeowners have bought homes with adjustable-rate mortgages since 2019.

In 2019, the average rate on a five-year ARM was 3.9%, compared to the 30-year fixed rate of 4.45%, according to Point, a home equity investment platform. Assuming an individual purchased a median ...

When an adjustable rate mortgage could make sense The primary appeal of ARMs lies in their lower initial interest rates compared to fixed-rate mortgages. These introductory rates typically last ...

A mortgage rate that's just half a percentage point lower than average can still result in big savings over time. Getty Images Homebuyers in the last few years haven't had many great options. They ...