Mortgage Rates Today: 5-Year ARM Rises by 10 Basis Points – August 15, 2025

As of today, August 15, 2025, the national average 30-year fixed mortgage rate sits at 6.64%, but the real story is the 5-year ARM mortgage rate, which has jumped 10 basis points to 7.33%. This means if you're looking at an adjustable-rate mortgage, you'll be paying a bit more than you would have yesterday. Let's dive into what this means for you.

Mortgage Rates Today: 5-Year ARM Rises by 10 Basis Points – August 15, 2025

Why You Should Pay Attention to Mortgage Rate Fluctuations

Buying a home is one of the biggest financial decisions most of us will ever make. Even small changes in interest rates can have a huge impact on your monthly payments and the total cost of your home over the life of the loan. Think about it: even a quarter of a percent difference on a $300,000 loan adds up to thousands of dollars over 30 years. So staying informed is key to making the best choice for your situation.

Current Mortgage Rate Snapshot (August 15, 2025)

Here's a quick overview of the mortgage rates from Zillow as they stand today:

• 30-Year Fixed Rate: 6.64% (down 4 basis points from last week)
• 15-Year Fixed Rate: 5.78% (up 1 basis point from yesterday)
• 5-Year ARM: 7.33% (up 10 basis points from yesterday)

A Closer Look at Adjustable-Rate Mortgages (ARMs)

ARMs, like the 5-year ARM, can be a bit trickier than fixed-rate mortgages. Here’s the lowdown:

• What is an ARM? It's a mortgage where the interest rate is fixed for a certain initial period, after which it adjusts periodically based on a benchmark interest rate (like the Prime Rate or the SOFR). The 5-year ARM has a fixed rate for the first five years, and then adjusts annually.
• The Appeal of ARMs: People are often drawn to ARMs because they initially offer lower interest rates than fixed-rate mortgages, which is attractive for now.
• The Catch: After the initial fixed-rate period, your interest rate can go up (or down) based on the market conditions. This means your monthly payments can increase significantly if interest rates rise.

Mortgage Rates on August 15, 2025: By Loan Type

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate	6.64%	down 0.04%	7.10%	down 0.03%
20-Year Fixed Rate	6.68%	up 0.20%	6.96%	up 0.09%
15-Year Fixed Rate	5.78%	up 0.03%	6.09%	up 0.04%
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	7.33%	up 0.10%	7.85%	up 0.07%
3-year ARM	—	0.00%	—	0.00%

Source: Zillow

Is a 5-Year ARM Right for You?

The 5-year ARM vs 30-year fixed-rate mortgage question is a crucial one. ARMs aren't right for everyone. Here are some reasons why you might consider one:

• Short-Term Plans: If you know you won't be staying in the house for more than five years, an ARM could save you money during that initial fixed-rate period.
• Expectation of Lower Rates: If you believe interest rates will decrease in the future, you might be willing to take the risk that your rate will adjust downward after the initial period.
• Financial Flexibility: Some people use the lower initial payments of an ARM to free up cash for other investments or expenses.

However, proceed with caution. I always advise people to carefully consider their risk tolerance before opting for an ARM. Could you comfortably afford your mortgage payments if the interest rate were to rise by a few percentage points? If the answer is no, a fixed-rate mortgage might be a safer bet.

The Federal Reserve's Role: A Quick Recap

The Federal Reserve (the Fed) has a big influence on mortgage rates. Here's a timeline:

• 2021-2023: The Fed raised rates aggressively to fight inflation, pushing mortgage rates way up.
• Late 2024: The Fed started cutting rates, providing some relief.
• 2025 (So Far): The Fed has paused rate cuts, creating uncertainty in the market.

The Fed's actions are always a balancing act. They want to control inflation while also supporting economic growth which gets harder everyday and is not an easy job for anybody. Right now, they are walking a tightrope, trying to figure out the best path forward. So far in 2025, Fed has held rates steady, but there are indicators of rate cuts by end of year.

The Fed's Next Moves and Their Impact on Mortgage Rates

Looking ahead, here are a few key things to watch for:

• Economic Data: The Fed will be closely monitoring inflation, GDP growth, and employment data to make their decisions.
• Upcoming Meetings: The September 16-17 meeting will be very important, as the Fed will release updated economic projections.
• Market Expectations: Keep an eye on what the market is predicting in terms of future rate cuts.

If the Fed starts cutting rates again, we could see mortgage rates decline toward 6% (or even lower) by the end of the year. But it's all dependent on how the economy performs.

My Thoughts and Advice

Navigating the world of mortgages can be confusing, and it's important to stay informed and make decisions that are right for your individual circumstances. Don't be afraid to talk to a mortgage professional who can walk you through your options and help you weigh the pros and cons of different loan types.

There's always uncertainty, and market sentiments can change in any direction. But by staying informed and carefully considering your own needs and risk tolerance, you can make smart choices that will set you up for financial success. You should always aim for a home within your budget rather than trying to max it out.