Mortgage Rates Today: 5-Year ARM Jumps by 3 Basis Points – August 16, 2025

As of today, August 16, 2025, the national average 5-year ARM (Adjustable-Rate Mortgage) rate has risen by 3 basis points to 7.26%. Let's dive into what this means for you, whether you're a potential homebuyer, a seasoned homeowner looking to refinance, or just curious about the ever-shifting world of mortgage finance.

Mortgage Rates Today: 5-Year ARM Jumps by 3 Basis Points – August 16, 2025

Understanding Today's Mortgage Rate Snapshot

Mortgage rates are anything but static. They dance to the tune of the economy, reacting to everything from inflation reports to Federal Reserve decisions. Here's a quick overview of where things stand today, courtesy of Zillow data:

• 30-Year Fixed Rate: 6.67% (down 1 basis point from last week)
• 15-Year Fixed Rate: 5.79% (up 4 basis points from last week)
• 5-Year ARM: 7.26% (up 3 basis points from last week)

To give you a complete picture, here’s a table summarizing the rates:

Program	Rate	1W Change	APR	1W Change
30-Year Fixed Rate	6.67%	down 0.01%	7.14%	up 0.01%
20-Year Fixed Rate	6.37%	down 0.10%	6.88%	0.00%
15-Year Fixed Rate	5.79%	up 0.04%	6.09%	up 0.04%
10-Year Fixed Rate	5.48%	0.00%	5.84%	0.00%
7-Year ARM	7.30%	up 0.21%	8.06%	up 0.47%
5-Year ARM	7.26%	up 0.03%	7.83%	up 0.05%
3-Year ARM	—	0.00%	—	0.00%

Why the Focus on the 5-Year ARM?

Now, you might be wondering why we're zeroing in on the 5-year ARM. While the 30-year fixed rate is the go-to mortgage for many, ARMs offer a different kind of opportunity – and risk. As the name suggests, during the initial fixed-rate period (in this case, five years), your interest rate stays the same. After that, it adjusts periodically based on a benchmark index (like the SOFR plus a margin agreed upon at the inception of the agreement).

For example, if you plan to move or upgrade within five years, or expect interest rates to fall in the near future, an ARM might seem enticing. You could potentially snag a lower initial rate than a fixed-rate mortgage. But there is always an element of risk as the rates may go up after that fixed period term gets over.

Diving Deeper: The Federal Reserve's Role

Mortgage rates don't just pop up out of nowhere. They're heavily influenced by the Federal Reserve (the Fed), and understanding the Fed's moves is crucial to predicting where rates are headed, as well as to understand today's mortgage rates.

• Pandemic Era: In 2021-2023 – The Fed kept rates super low to help the economy recover from the pandemic.
• Struggling with Inflation: The Fed then aggressively raised rates to combat inflation, indirectly pushing mortgage rates upward.
• Recent Actions: After raising the rates continuously, the Fed cut rates three times in late 2024, reducing the federal funds rate by 1 percentage point to 4.25%-4.5%.
• 2025 Status: The Fed has now held rates steady consecutively for five meetings in 2025. There are varying opinions amongst them with some advocating for immediate cuts to address slowing growth.
• Impact on Mortgage Rates: 30-year fixed rates have hovered near 6.8% through mid-2025, with modest declines expected later this year if cuts materialize.

The Big Picture: What Does It All Mean?

So, how should you interpret all of this information?

• For Homebuyers: If you're on the fence about buying, keep a close eye on the Fed's upcoming meetings, especially September 16-17 because it will give an updated economic projections, as well as the December meeting of this year. Any rate cuts could provide some relief. If you believe that interest rates will be stable in 5 years, ARM can be a good option.
• For Refinancers: If your current mortgage rate is above 7%, keep a close eye on the Fed's decision and actions. There are potential opportunities coming along the way.

I believe that nobody can accurately predict the future, it's always a smart plan to be prepared and informed. By staying informed and consulting with a financial advisor, you can make smart choices.