Mortgage Rates Today: 5-Year ARM Jumps by 9 Basis Points – August 14, 2025

So, the big question everyone's asking is: what's happening with mortgage rates? Well, the 5-year Adjustable Mortgage Rate just jumped by 9 basis points, landing at 7.20% on August 14, 2025. This increase, reported by Zillow, naturally has potential homebuyers and current homeowners wondering what it all means and if it’s time to rethink their plans.

Mortgage Rates Today: 5-Year ARM Jumps by 9 Basis Points – August 14, 2025

Why Should You Care About ARMs Anyway?

Before we dive into the numbers, let's talk Adjustable Rate Mortgages (ARMs). Unlike fixed-rate mortgages where your interest payment stays the same over the life of the loan, ARMs have an interest rate that adjusts periodically based on market conditions. That 5-year ARM we're talking about? It means your initial interest rate is fixed for the first five years, and then it can change annually after that, usually tied to a benchmark interest rate plus a margin.

Mortgage Rate Snapshot: August 14, 2025

Okay, let's get a clear view of where all the major mortgage rates stand. This gives us some perspective on the ARM increase.

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate	6.62%	down 0.06%	7.13%	0.00%
20-Year Fixed Rate	6.68%	up 0.20%	6.96%	up 0.09%
15-Year Fixed Rate	5.70%	down 0.05%	6.04%	down 0.01%
10-Year Fixed Rate	5.48%	0.00%	5.84%	0.00%
7-year ARM	7.82 %	up 0.73 %	7.94 %	up 0.35 %
5-year ARM	7.20%	down 0.02%	7.86%	up 0.08%
3-year ARM	—	0.00%	—	0.00%

Source: Zillow

The Jumps and Dips: Decoding the Data

Here's what jumps out at me from the rate overview:

• 30-Year Fixed Still King: The 30-year fixed remains the most popular choice, and it's actually down slightly from the week before. This is good news for people wanting predictable payments.
• ARMs are Mixed: The 5-year ARM jumped by 9 basis points, while the 7-year ARM increased by a whopping 73 basis points and the 3 year ARM didn't change! This tells me that the market is still trying to find its footing and that these short-term rates are sensitive to current fluctuations.
• 15-Year Fixed Looks Tempting: With rates at 5.70%, the 15-year fixed is definitely worth a look if you can afford the higher monthly payments. You'll pay off your mortgage much faster and save a bundle on interest.

Is a 5-Year ARM Right for You in 2025?

Now, let's get to the heart of the matter: should you even consider a 5-year ARM right now? Here's my take:

• The Upside: If you only plan to stay in the home for a short period, say less than five years, a 5-year ARM might look appealing. You could snag a slightly lower initial interest rate than a fixed-rate mortgage, potentially saving you money upfront.
• The Downside: The biggest risk with ARMs is the possibility of interest rates increasing after the initial fixed-rate period. This could lead to higher monthly payments that stretch your budget. It's like gambling a little.
• Risk Tolerance is Key: If you're comfortable with some uncertainty and believe interest rates will stay relatively stable, an ARM might be worth considering. But if you prefer the security of a fixed payment, stick with a fixed-rate mortgage. I'm a generally risk-averse person, so I usually prefer fixed-rate options for myself.

The Fed Factor: What's the Central Bank Got To Do With It?

Okay, so you're probably thinking, “What the heck's the Federal Reserve have to do with my mortgage rate?” Well, the Fed plays a huge role in setting the stage for interest rates in general. Any commentary on Adjustable Rate Mortgage (ARM) is incomplete without talking about the role of the Federal Reserve. The Fed doesn't directly set mortgage rates, but its actions influence them significantly.

Here's the gist:

• The Fed Rate Hikes of 2022-2023: To fight inflation, the Fed aggressively raised the federal funds rate, which indirectly pushed mortgage rates to 20-year highs.
• The Pivot to Cuts in Late 2024: The Fed started cutting rates to boost the economy. This gave homeowners and potential buyers some much-needed relief.
• 2025: A Holding Pattern: The Fed has held rates steady for most of 2025, mainly because they're seeing mixed signals: inflation is still a bit high, but economic growth is slowing down. It's a tough balancing act.

What the Fed's Next Move Means for You

The big question is: what's the Fed going to do next?

• September and December Meetings are Key: The Fed's meetings in September and December 2025 will be critical. They'll be looking at the latest economic data to decide whether to cut rates again or stay put.
• Potential Rate Cuts Later This Year: If the economy weakens further, the Fed is likely to cut rates again, which would likely bring mortgage rates down a bit. I think that's the likely scenario.
• Long-Term Outlook: Gradual Easing: The Fed is expected to gradually lower rates over the next few years. This should provide some long-term stability to the housing market.

How to Navigate the Current Mortgage Maze

So, what should you do given all this uncertainty? Here's my advice:

• Shop Around: Don't just go with the first mortgage lender you find. Get quotes from multiple lenders to compare rates and fees.
• Consider Your Financial Situation: Be honest with yourself about what you can afford. Don't stretch your budget too thin, especially with the possibility of rising ARM rates.
• Talk to a Mortgage Professional: A good mortgage broker can help you understand your options and find the best loan for your needs.

The Bottom Line on the 5-Year ARM Jump

The increase in the 5-year adjustable mortgage rate is something to be aware of, but it shouldn't necessarily scare you away from buying a home or refinancing. The mortgage market is dynamic, and rates are constantly fluctuating. The 5-year adjustable mortgage rates are hovering near 7.20% in the middle of August 2025 and may get better when the Fed starts cutting rates; remember to do your homework, consider your individual circumstances, and make informed decisions. Don't try to time the market perfectly.