Current ARM Loan Rates for December 2022

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What Is an ARM Loan?

An adjustable rate mortgage (ARM) is a home loan with a variable interest rate that fluctuates based on market conditions.

The rate on an ARM loan, which typically lasts for 30 years, changes at predetermined times over the life of the loan, with limits in place to cap increases and decreases. Each ARM loan has  two numbers associated with it, indicated as 7/1 ARM, for example. These indicate what the rate adjustment schedule is. The first number indicates the initial fixed-rate period, while the second number indicates how often the variable rate will update. So a 7/1 ARM loan will have the same interest rate for seven years. After that, the rate may readjust once a year through the end of the loan.

Pro Tip

ARM loans are riskier. But if you have solid credit, secure a great rate through your lender, and can afford to pay off your mortgage before the rate changes, it might be a better option for you over a conventional mortgage.

ARM Loan vs. Fixed-Rate Loan

An ARM loan has an interest rate that changes based on the market, while a fixed-rate loan’s interest rate stays the same through the lifetime of the loan. 

ARM loans are considered riskier because rates could go up dramatically — a feature that contributed to the foreclosures of the 2008 housing crisis. However, they’re attractive to borrowers when the average mortgage rate is high and they’re able to secure favorable rates through an ARM. 

There are a few situations where an ARM loan could make sense over a conventional, fixed-rate mortgage. For example, an ARM loan might be more beneficial if you’re not planning on staying in your home for more than five to 10 years or you can afford to pay off your mortgage before the rate changes. Additionally, those looking to get a jumbo loan may benefit from an ARM loan because the difference between fixed and adjustable rate tends to be larger.

What Experts Say About Adjustable-Rate Mortgages

A 30-year fixed rate mortgage is pretty straightforward – your interest rate, and your monthly payment, will stay the same for three decades – but an ARM is more complicated. It also involves a bit more of a gamble on your part as the borrower. It’s for that risk that you can usually get a much better interest rate, to the tune of about a percentage point lower than for a fixed-rate loan. The bet is on one of two things: Either you’ll move (or refinance) before the initial term with a lower fixed rate is over, or you expect rates will drop by the end of that period.

Adjustable-rate loans were less common in the past two years as interest rates were at historic lows, and taking that bet didn’t make any sense. Now that rates have risen to levels not seen in more than a decade, it might make sense for some, particularly first-time homebuyers who don’t think they’ll be in the home more than a few years. Ace Watanasuparp, national director of strategic sales at Citizens Bank, suggests buyers considering ARMs get one with an initial fixed-rate period longer than they expect to be in the home. “Give yourself a little room,” he told us.

Be careful if you’re expecting interest rates to come down significantly, says Skylar Olsen, principal economist at Tomo, a digital real estate and mortgage company. “It’s reasonable for someone to make but I don’t know that you would bet on it. It could be painful if rates jump back up to 6% or keep going higher,” she says.

ARMs also raise some borrowers’ concerns because they were one of the drivers of the subprime mortgage crisis. There are some key differences between then and now, Olsen says, namely that lending standards are much higher now and the vast majority of loans today are 30-year fixed rate mortgages. ARMs were misused by predatory lenders in the early 2000s, she says. “It’s a responsible thing to do as long as you emphasize when an ARM is appropriate, and that is when you know you’re not going to stay for very long.”

The Latest Mortgage Rate & Housing News

What’s Going On With Rising Mortgage Rates?

Mortgage rates have been on the rise since the start of the year and haven’t stopped yet. A big reason behind the increase is that inflation has remained at its highest level in 40 years. The Consumer Price Index was up 8.2% year-over-year in September – lower than August but still well above what markets and the Federal Reserve are comfortable with.

The Fed’s approach to high inflation has been to raise its benchmark short-term interest rate, a strategy that aims to make borrowing more expensive and encourage saving, driving down demand for goods and services and reducing prices. The Fed last raised its federal funds rate in September, and is expected to do so again in November.

The economic situation has mortgage rates jumping up and down on a daily basis.

“The market just can’t really decide which way it wants to go in terms of the direction of rates,” says Melissa Cohn, regional vice president of William Raveis Mortgage in New York.

Don’t expect mortgage rates to plummet until economic conditions change, experts say.

“Until we get some sustained evidence that inflation is beginning to recede, the upward pressure on mortgage rates will remain,” Odeta Kushi, deputy chief economist at First American Financial Corporation, told us.

What Can Homebuyers Do About Rising Mortgage Rates?

The current housing environment is particularly tough for first-time homebuyers, but it might still make sense to buy. “It’s always a good time to buy a home, if that’s what is important to you. It’s just about doing your research and making good informed decisions,” Eileen Derks, head of mortgage at Laurel Road, told us

Rising mortgage rates have made affordability increasingly difficult for homebuyers, despite some drops in home prices. If you’re considering a mortgage, experts say it’s more important than ever to shop around with different lenders, as rates can vary dramatically from day to day and from lender to lender.

“Until you’re ready to lock, you need to keep your eye on more than one ball,” Cohn says.

What’s Happening With Home Prices?   

The big surge in mortgage rates has started to bring down home prices. The median existing home sold for $389,500, up 7.7% from a year earlier but down from figures of more than $400,000 seen earlier in the summer, according to the National Association of Realtors (NAR).

How quickly the housing market is turning around depends on where you are. In some cities, prices are seeing month-to-month price drops of nearly 3%, while others are still riding a wave of increases. “It’s very market-dependent at the moment,” says Robert Heck, vice president of mortgage at Morty, an online mortgage broker. 

Home sales figures are dropping significantly – down 0.4% from July to August and nearly 20% from August 2021 – in part because homeowners who have favorable mortgage rates are unwilling to sell and get a loan at a much higher rate. 

Homebuyers facing a difficult environment can find creative ways to save money on a home purchase. One is to consider an adjustable-rate mortgage, Cohn says. They tend to offer periods of several years with a fixed rate – and it should be significantly lower than a 30-year fixed rate would be – before the rate starts to adjust with the market. That should give you a few years to refinance if the market improves.

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What Are Today’s ARM Loan Rates?

On Wednesday, December 07, 2022 according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 5/1 ARM loan rate is 5.460% with an APR of 7.400%.

Current ARM Loan Rates

ProductInterest RateAPR
30-Year Fixed Rate6.720%6.730%
30-Year FHA Rate5.980%6.860%
30-Year VA Rate6.170%6.380%
30-Year Fixed Jumbo Rate6.730%6.740%
20-Year Fixed Rate6.530%6.550%
15-Year Fixed Rate6.000%6.030%
15-Year Fixed Jumbo Rate5.990%6.020%
10-Year Fixed Rate6.090%6.120%
5/1 ARM Rate5.240%7.190%
5/1 ARM Jumbo Rate5.200%6.970%
7/1 ARM Rate5.790%7.120%
7/1 ARM Jumbo Rate6.040%6.790%
10/1 ARM Rate6.380%6.850%
ProductInterest RateAPR
30-Year Fixed Rate6.660%6.680%
30-Year FHA Rate6.050%6.920%
30-Year VA Rate6.200%6.320%
30-Year Fixed Jumbo Rate6.660%6.670%
20-Year Fixed Rate6.570%6.590%
15-Year Fixed Rate6.000%6.030%
15-Year Fixed Jumbo Rate6.020%6.030%
10-Year Fixed Rate6.100%6.140%
5/1 ARM Rate5.460%7.400%
5/1 ARM Jumbo Rate5.310%7.380%
7/1 ARM Rate5.860%7.210%
7/1 ARM Jumbo Rate6.060%6.830%
10/1 ARM Rate6.330%6.930%

Rates as of Wednesday, December 07, 2022


These rate averages are based on weekday mortgage rate information provided by national lenders to, which like NextAdvisor is owned by Red Ventures. These averages provide borrowers a broad view of average rates that can inform borrowers when comparing lender offers. We feature both the interest rate and the annual percentage rate (APR), which includes additional lender fees, so you can get a better idea of the overall cost of the loan. The actual interest rate you can qualify for may be different from the average rates quoted in our rate table. But these rates are useful for giving you a benchmark to use when comparing loan offers by giving you a sense of how the type of mortgage and the length of the repayment term impacts your interest rate and APR.

What Are the Different Types of ARM Loans?

There are many times of ARM loans to choose from. Here are the main ones.

  • Hybrid: Offers a fixed rate for a preset time period, then becomes an adjustable rate through the end of the loan. The most common term is 5/1 — fixed for five years, then the rate changes once per year.
  • Interest-only loans: For a set period of time, the borrower pays only the monthly interest on the loan and not the principal. After this period, the mortgage is amortized and your payments will increase so the loan is paid off by the end of the term.
  • Option ARMs: At the beginning of the loan, you’re given four different payment options: an agreed monthly payment, an interest-only payment, a 15-year amortizing payment, and a 30-year amortizing payment. These tend to be riskier, because your payment may not cover enough to stay on track with your payoff schedule.


Both VA and FHA ARM loans are backed by the federal government. Through low to 0% down-payment requirements and lenient credit standards, these loans, which offer fixed- and adjustable-rate products, are intended to create pathways to homeownership for people who otherwise wouldn’t be able to afford it. You’ll need to get these loans through approved lenders rather than through the government agencies themselves.

VA ARM loans are used by veterans and active-duty servicemembers to buy homes with 0% down and no private mortgage insurance. To get a VA loan, you need a Certificate of Eligibility (COE) to prove you qualify for the benefit, and you’ll also pay a VA funding fee during closing.

FA ARM loans are intended for low-to-moderate income families who cannot afford the traditional 20% down-payment requirement. FHA loans can require as little as 3.5% down, depending on your credit score. Credit standards for FHA loans are also more lenient compared to conventional loans. Just keep in mind that the lender will have it’s own standards you’ll have to meet as well, so make sure you have a strong financial profile and good credit before you go this route.