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Current ARM Mortgage Rates Report for Aug. 25, 2026
If you’re planning to buy a home and the idea of a mortgage with an interest that fluctuates doesn’t scare you, you might be the target customer base for adjustable-rate mortgages. While fixed-rate mortgages are by far more popular, ARMs can be a smart financing option for folks who intend to rent out or flip the property they’re buying, or who know they’ll move before the ARM’s fixed-rate period ends and adjustment periods begin.
TL;DR
- Adjustable-rate mortgages (ARMs) are an alternative to fixed-rate mortgages, appealing to about 8% of homeowners.
- ARMs are beneficial for short-term/starter home buyers, real estate investors, and buyers during high-interest-rate periods.
- ARM rates adjust after an initial fixed period based on benchmark rates (e.g., SOFR), lender margins, and rate caps.
- Common ARM structures include 5/1 (five years fixed, then annual adjustments) and 10/6 (ten years fixed, then semi-annual adjustments).
- Pros of ARMs include lower initial rates and potential for lower payments, while cons include payment uncertainty and less stability.
- Refinancing from an ARM to a fixed-rate loan is possible if circumstances change, such as deciding to stay in the home longer.