Current ARM Mortgage Rates Are Down From Last Week – June 28, 2025

Are you thinking about buying a home or refinancing in June 2025? One of the most important things to consider is interest rates for mortgages. As of June 28, 2025, the national average 5-year ARM (Adjustable-Rate Mortgage) rate is 7.49%. This is down 7 basis points from the previous week. But is an ARM right for you? Let's dive into the details.

Current ARM Mortgage Rates for June 28, 2025: What You Need to Know

What is an ARM? Briefly Explained

Before we delve deeper, let's quickly define what an ARM mortgage is. An ARM is a type of mortgage where the interest rate is fixed for an initial period, and then it adjusts periodically based on market conditions. The “5-year ARM” means the rate is fixed for the first five years and can then change annually.

A Snapshot of June 28, 2025 Mortgage Rates

Here's a summary of the mortgage rates as of the latest update provided by Zillow on Saturday, June 28, 2025.

• 30-Year Fixed-Rate Mortgage: 6.73% (down 18 basis points from the previous week)
• 15-Year Fixed-Rate Mortgage: 5.74% (down 1 basis point from the previous week)
• 5-Year ARM: 7.49% (down 7 basis points from the previous week)

It's worth noting that mortgage rates can fluctuate daily, so it's advisable to monitor them closely if you are planning to take out a mortgage soon.

A Detailed Look at ARM Rates

Let's zoom in on ARM mortgage rates in various buckets.

Conforming Loans

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
7-year ARM	7.29%	down 0.15%	7.80%	down 0.01%
5-year ARM	7.49%	up 0.29%	7.97%	up 0.17%
3-year ARM	—	0.00%	—	0.00%

Jumbo Loans

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
7-year ARM	7.42%	down 0.10%	8.00%	down 0.06%
5-year ARM	7.31%	down 0.41%	7.83%	down 0.26%
3-year ARM	—	0.00%	—	0.00%

ARM vs. Fixed-Rate Mortgages: Which is Right for You?

The big question: should you go with an ARM or a fixed-rate mortgage? Here's how I usually advise people to think about it:

• Fixed-Rate Mortgages: These offer stability and predictability. Your interest rate remains the same for the life of the loan, making it easier to budget. This is a safer pick, especially if you plan to stay in your home for longer.
• ARMs: These can be attractive because they often start with lower interest rates than fixed-rate mortgages. This means lower monthly payments in the initial years. However, the rate can adjust (go up or down) after the initial fixed period, introducing uncertainty. ARMs might be a good option if you:
  • Plan to move or refinance before the rate adjusts.
  • Believe that interest rates will decrease in the future.
  • Can comfortably afford higher payments if the rate increases.

Here's a quick comparison table:

Feature	Fixed-Rate Mortgage	Adjustable-Rate Mortgage (ARM)
Interest Rate	Fixed for the life of the loan	Adjusts after initial fixed period
Monthly Payment	Predictable and consistent	Can change after the initial fixed period
Risk	Lower risk, predictable costs	Potentially higher risk due to rate adjustments
Best For	Long-term homeowners, risk-averse buyers	Short-term homeowners, rate decrease believers

Factors Influencing ARM Rates

Several factors impact ARM rates. Understanding these can help you make more informed decisions.

• The Prime Rate: This is the interest rate that banks charge their best customers. ARM rates are often tied to the prime rate, so when the prime rate goes up or down, ARM rates tend to follow.
• The Federal Reserve (The Fed): The Fed sets the federal funds rate, which influences borrowing costs across the economy, including mortgage rates.
• Inflation: When inflation is high, interest rates tend to rise to compensate lenders for the decreased purchasing power of future payments.
• Economic Growth: A strong economy often leads to higher interest rates as demand for borrowing increases.
• Global Events: Major global events, such as economic crises or geopolitical instability, can impact financial markets and influence interest rates.

Expert Advice:

It's not enough to say interest rates are trending one way or the other. It also helps to consider the broader picture. Are jobs being added to the economy? Are average wages going up? What is the unemployment rate? Are US treasuries yielding a greater ROI than real estate? These are some of the more important things to consider when trying to assess the current and future state of mortgage rates.

Tips for Securing the Best ARM Rate

If you're leaning toward an ARM, here are some tips to increase your chances of getting a favorable rate:

• Improve Your Credit Score: A higher credit score typically qualifies you for lower interest rates. Review your credit report and address any errors or outstanding debts.
• Save for a Larger Down Payment: A larger down payment reduces the amount you need to borrow, which can result in a lower interest rate.
• Shop Around: Don't settle for the first offer you receive. Compare rates from multiple lenders to find the best deal.
• Negotiate: Don't be afraid to negotiate with lenders. They may be willing to offer a lower rate to earn your business.
• Consider Rate Caps: ARM loans often have rate caps that limit how much the interest rate can increase during each adjustment period and over the life of the loan. Understanding these caps can help you manage potential risks.

Looking Ahead: What's Expected for Mortgage Rates?

Predicting future mortgage rates is challenging, but here's what to consider:

• Economic Forecasts: Pay attention to economic forecasts from reputable sources, such as the Federal Reserve, major banks, and financial analysts. These forecasts often include predictions about economic growth, inflation, and interest rates.
• Fed Policy: Keep an eye on the Federal Reserve's monetary policy decisions. Any changes to the federal funds rate can have a significant impact on mortgage rates.
• Market Trends: Monitor trends in the bond market, as mortgage rates often track the yield on 10-year Treasury bonds.

Mortgage rates are constantly changing, and it's crucial to stay informed to make the best financial decisions. Whether you opt for a fixed-rate mortgage or an ARM, understanding the current market conditions, your financial situation, and your long-term goals is key.