5 Year Adjustable Rate Mortgage Rates Explained

A 5-year adjustable rate mortgage rate is the rate a borrower pays for the first five years of an ARM. After that, the rate resets to an index plus a margin, within limits set by caps. In September 2026, published readings of that start rate ranged from 6.10% to 7.03%, depending on the source and the day.

The benchmark it is measured against kept rising. Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed at 7.03% for the week of September 24, 2026. That was up from 6.95% a week earlier and 6.71% on September 3. The same survey carries no ARM figure. Freddie Mac stopped publishing ARM rates in November 2022, saying fixed-rate loans dominate the market and that ARMs increasingly use non-Treasury indexes.

That matters to any buyer weighing a lower start rate against a fixed payment. No single weekly number says what a 5-year ARM costs. What a borrower can test is how the quote in hand is built, and what it would have to survive at reset.

The lender prices the start rate at application, and that rate holds through the fixed period. After the fixed period, the rate follows a formula the Consumer Financial Protection Bureau states as "Index + Margin = Your Interest Rate," subject to caps. The lender chooses the index at application, and that choice typically does not change. The margin is fixed at closing and never moves. Together they make the "fully indexed rate." The agency notes that margins vary between lenders and can be negotiated.

Most new ARMs use SOFR, the Secured Overnight Financing Rate, as the index, according to Bankrate and Fortune. Fortune puts typical margins at 2% to 3.5%, depending on the lender, the loan type and the borrower's creditworthiness. It also reports that most new ARMs reset every six months after the fixed period, which is why the product is often sold as a 5/6.

Caps set the limits. According to the CFPB, the cap on the first adjustment is commonly 2 or 5 percentage points. Later adjustments are typically capped at 1 to 2 points each. The lifetime cap is most commonly 5 points. Mortgage-Info describes a 2/2/5 structure as the conventional standard.

Points and loan terms move the start rate as well. The Mortgage Bankers Association's 5/1 average assumes an 80% loan-to-value loan with 0.76 points, including the origination fee, for the week ending September 18. A quote with no points or a larger loan relative to the home's value is a different loan from the one in the average.

The MBA's weekly survey had the 5/1 ARM at 6.10% for the week ending September 18, down from 6.23%. Over the same week its 30-year conforming rate rose to 7.12% from 6.97%. That left a gap of about 102 basis points. ARM share of applications rose to 9.8% from 8.4%.

"Rates for 5/1 ARMs were more than a percentage point lower than those for fixed rate loans," said Mike Fratantoni, the MBA's chief economist.

Bankrate listed a 5/1 ARM APR of 6.53% on September 27, against a 30-year fixed purchase rate of 7.22%. Fortune, citing Mortgage Research Center data, put a conforming 5/6 ARM at 6.522% on September 21 and the jumbo version lower, at 6.272%.

The high reading came on a single day. Nadlan Capital Group reported the 5/1 ARM at 7.03% on September 9, a 39-basis-point jump from 6.64%. That put it 30 basis points above that day's 30-year fixed rate of 6.73%.

The spread among these readings reflects more than the market. The sources measure different products, 5/1 against 5/6. One reports APR rather than the interest rate. Their point assumptions differ, and so do their dates.

Mortgage-Info's September 1 comparison on a $400,000 loan puts the monthly payment on a 5/1 ARM at 6.00% at $2,398. The payment on a 30-year fixed at 7.00% is $2,661. That is a difference of $263 a month, or about $15,780 over the 60-month fixed period.

The risk comes after that. Under a 2/2/5 cap structure, the same ARM could reach 8.00% at the first reset and 11.00% over its life. At 11.00%, the site puts the payment at $3,809. The ARM comes out ahead only if the rate after reset stays close enough to the fixed rate, for long enough, that the borrower keeps most of the $15,780. A full break-even calculation turns on how long the borrower plans to hold the loan.

On this month's figures, the MBA's 6.10% ARM sits 0.93 point below Freddie Mac's 7.03% fixed, or 1.02 points below the MBA's own fixed rate. HonestCasa, a housing blog, sets 0.75 to 1.00 point as the discount it wants for a homeowner keeping the loan more than five years.

Where any reset will land is not known. It depends on SOFR at the time plus the loan's margin. None of the sources gives a current SOFR level.

The case against is in the same data. On September 9 the ARM priced above the fixed rate for a day. HonestCasa recommends the fixed rate when the discount is 0.25 point or less. A plan to refinance before the reset also depends on rates cooperating. The MBA's refinance applications were down 62% from a year earlier in mid-September, according to Get Out of Debt, citing the survey.

The useful comparison is part by part, not against a headline. That means the start rate and points, the index, the margin, and all three caps. The CFPB says lenders with identical start rates can carry very different cap structures. It also says the Loan Estimate, due within three business days of application, must disclose the maximum payment.

A borrower with those terms in writing from more than one lender can see which margin is lower and which caps are tighter before locking the rate. Locking the rate comes after that comparison, not before it.