Today’s 5-Year Adjustable Rate Mortgage Rises Back – June 23, 2025

Worried about rising interest rates? You're not alone. As of today, June 23, 2025, the national average 5-year Adjustable Rate Mortgage (ARM) has risen to 7.08%. This increase, while seemingly small, can have a significant impact on your home buying or refinancing plans. Let's unpack what's happening with mortgage rates right now and how it might affect you.

Today's 5-Year Adjustable Rate Mortgage Rises Back – June 23, 2025

Think of a mortgage as a marathon, not a sprint. Even a slight change in the interest rate can significantly impact how much you pay month to month and overall in the long run for your home. A seemingly small decimal point difference can add up to thousands of dollars over the life of a 30-year mortgage. This is why keeping an eye on these fluctuations is incredibly important, even if you're not actively looking to buy or refinance right now.

What's Happening with Mortgage Rates Today?

Let's dive into the specifics as of today, June 23, 2025, derived from Zillow's latest data:

• 30-Year Fixed Mortgage Rate: Averaging 6.88%, down 2 basis points from 6.90% prior day & down 3 basis points from previous week
• 15-Year Fixed Mortgage Rate: Currently at 5.91%, decreased 1 basis point from 5.92% prior day & down 5 basis points from previous week
• 5-Year ARM: Sitting at 7.08%, up 3 basis points from 7.05% prior day & down 12 basis points from previous week

Here's a more detailed breakdown:

Conforming Loans

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate	6.88%	down 0.04%	7.31%	down 0.06%
20-Year Fixed Rate	6.37%	down 0.21%	6.80%	down 0.16%
15-Year Fixed Rate	5.91%	down 0.05%	6.19%	down 0.07%
10-Year Fixed Rate	5.85%	down 0.08%	6.04%	down 0.03%
7-Year ARM	7.50%	up 0.07%	7.73%	down 0.09%
5-Year ARM	7.08%	down 0.12%	7.72%	down 0.07%
3-Year ARM	—	0.00%	—	0.00%

Government Loans

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate FHA	7.35%	up 0.02%	8.38%	up 0.02%
30-Year Fixed Rate VA	6.43%	up 0.02%	6.66%	up 0.05%
15-Year Fixed Rate FHA	6.11%	up 0.51%	7.08%	up 0.51%
15-Year Fixed Rate VA	5.98%	up 0.06%	6.34%	up 0.10%

Jumbo Loans

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate Jumbo	7.41%	up 0.14%	7.88%	up 0.20%
15-Year Fixed Rate Jumbo	6.55%	down 0.04%	6.86%	up 0.01%
7-Year ARM Jumbo	7.53%	0.00%	8.06%	0.00%
5-Year ARM Jumbo	7.53%	down 0.18%	7.97%	down 0.12%
3-Year ARM Jumbo	—	0.00%	—	0.00%

What is an Adjustable Rate Mortgage (ARM)?

An ARM is a type of mortgage where the interest rate is fixed for an initial period, and then it adjusts periodically based on a benchmark interest rate. In the case of a 5-year ARM, the rate is fixed for the first five years, after which it can adjust annually.

The Pros and Cons of an ARM:

• Pros:
  • Lower Initial Interest Rate: ARMs often start with a lower interest rate than fixed-rate mortgages, potentially saving you money in the first few years.
  • Good for Short-Term Homeownership: If you plan to move before the fixed-rate period ends, an ARM can be a cost-effective option.
  • Potential for Rate Decreases: If interest rates fall during the adjustable period, your mortgage payments could decrease.
• Cons:
  • Interest Rate Risk: The biggest risk is that interest rates could rise significantly after the fixed-rate period, leading to higher monthly payments.
  • Complexity: ARMs can be more complex than fixed-rate mortgages, making them harder to understand.
  • Payment Shock: If rates rise sharply after the fixed period, you could experience “payment shock,” where your monthly payments become unaffordable.

Why is the 5-Year ARM Rate Rising?

Several factors influence mortgage rates, and it's rarely one single event that causes them to fluctuate. Here are some of the primary drivers:

• The Federal Reserve (The Fed): The Fed's monetary policy decisions, particularly changes to the federal funds rate, have a direct impact on borrowing costs. If the Fed raises rates to combat inflation, mortgage rates typically follow suit.
• Inflation: Inflation erodes the value of money. Lenders demand higher interest rates to compensate for the expected loss of purchasing power over the life of the loan.
• The Economy: A strong economy often leads to higher interest rates as demand for borrowing increases. Conversely, a weak economy can lead to lower rates as the Fed tries to stimulate growth.
• Global Events: Unexpected global events, such as geopolitical instability or economic crises, can create uncertainty in the market and influence interest rates.
• Investor Confidence: Mortgage rates are also influenced by how investors feel. If investors are confident in the market, rates may remain stable; however, if investors are unsure, rates may rise.

How Does This Affect Homebuyers and Homeowners?

For those looking to buy a home or refinance, here’s what you need to consider:

• For Homebuyers:
  • Affordability Check: Rising rates mean reduced affordability. Reassess your budget and how much you can comfortably afford each month.
  • Consider a Lock: If you find a rate you like, consider locking it in to protect yourself from further increases prior to closing.
  • Explore All Options: Don't just look at one type of mortgage. Consider fixed-rate options, different ARM terms, and government-backed loans to find the best fit.
• For Homeowners:
  • If You Have an ARM: Be prepared for potential rate adjustments. Review your loan terms and understand how often your rate can change and what the maximum rate is.
  • Refinance Evaluation: If rates are still lower than your current ARM rate, consider refinancing to a fixed-rate mortgage for stability. I always tell my clients to do the math and figure out the break even point and if it makes sense as per future goals.
  • Budgeting: Prepare for potential increases in your monthly payments.

What to Do During Rate Volatility

Navigating the mortgage market can be tricky, especially when rates are fluctuating. Here's my take, based on years of experience helping people achieve their homeownership goals:

• Don't Panic: Market fluctuations are normal. Making rash decisions based on short-term rate movements is rarely a good idea.
• Do Your Research: Understand the different types of mortgages and how they work. Don't rely solely on what you hear from friends or family.
• Get Professional Advice: Talk to a qualified mortgage broker or financial advisor. They can provide personalized guidance based on your specific financial situation and goals.
• Focus on Long-Term Goals: Consider your long-term financial goals and how buying a home fits into that plan. Don't let short-term rate fluctuations derail your dreams.
• Shop Around: Don't settle for the first offer you receive. Get quotes from multiple lenders to ensure you're getting the best possible rate and terms.

What to Expect in the Near Future

Predicting the future is impossible, but we can make educated guesses based on economic trends and expert opinions. Keep an eye on:

• Inflation Data: Watch for upcoming inflation reports, as they will heavily influence the Fed's decisions.
• Fed Meetings: Pay attention to the Federal Reserve's meetings and announcements regarding monetary policy.
• Economic Indicators: Monitor key economic indicators such as GDP growth, employment figures, and consumer spending.

Final Thoughts

The rise of the 5-year ARM to 7.08% today highlights the ever-changing nature of the mortgage market. Whether you're a first-time homebuyer or a seasoned homeowner, staying informed and seeking expert advice is crucial. Remember, knowledge is power when it comes to making sound financial decisions.

By carefully evaluating your options, understanding the risks and benefits of different mortgage products, and working with trusted professionals, you can navigate the mortgage market with confidence and achieve your homeownership goals.