Today’s 5-Year Adjustable Rate Mortgage Rises Significantly by 30 Basis Points – July 9, 2025

Are you trying to keep up with the ever-changing mortgage market? Today, July 9, 2025, potential homebuyers are seeing some shifts. The national average for a 5-year Adjustable-Rate Mortgage (ARM) has jumped to 7.89%. That's a significant move that could impact your home-buying strategy. Let's break down what this means for you, compare it to other mortgage options, and explore potential future trends.

Today's 5-Year Adjustable Rate Mortgage Rises Significantly by 30 Basis Points – July 9, 2025

As of today, here's a snapshot of where mortgage rates stand, according to Zillow:

• 30-Year Fixed Mortgage Rate: 6.83% (up 6 basis points from the previous week)
• 15-Year Fixed Mortgage Rate: 5.88%
• 5-Year ARM: 7.89% (up 30 basis points from the previous week)

It's worth noting that the 30-year fixed rate, the most popular choice, actually decreased by 3 basis points from yesterday to 6.83%. However, the increase in the 5-year ARM rate is the headline news, suggesting some potential volatility in the market. 30 basis points is quite a notable jump in terms of mortgages.

Why the Focus on the 5-Year ARM?

While fixed-rate mortgages offer stability, ARMs, especially the 5-year variety, can be attractive to certain borrowers. But what exactly is an ARM, and why does this rate surge matter?

An ARM works like this: For a set period (in this case, five years), you pay a fixed interest rate. After that period, the rate adjusts periodically based on a benchmark index, plus a margin determined by the lender.

ARMs can be appealing when:

• You expect to move or refinance before the fixed-rate period ends.
• You believe interest rates will decrease in the future.
• You want a lower initial rate than a fixed-rate mortgage to qualify for a larger loan.

However, the risk is that your interest rate could increase after the fixed period, leading to higher monthly payments. This is where the recent surge in the 5-year ARM rate should give potential borrowers pause.

Breaking Down the Numbers: A Detailed Look

Here's a more comprehensive view of current mortgage rates across different loan types:

Conforming Loans:

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate	6.83%	up 0.05%	7.29%	up 0.06%
20-Year Fixed Rate	6.56%	up 0.21%	7.06%	up 0.37%
15-Year Fixed Rate	5.88%	up 0.07%	6.18%	up 0.08%
10-Year Fixed Rate	5.58%	down 0.04%	5.77%	0.00%
7-year ARM	7.43%	up 0.08%	7.98%	up 0.19%
5-year ARM	7.89%	up 0.30%	8.15%	up 0.16%
3-year ARM	—	0.00%	—	0.00%

Government Loans:

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate FHA	6.45%	down 0.32%	7.47%	down 0.33%
30-Year Fixed Rate VA	6.30%	up 0.01%	6.50%	0.00%
15-Year Fixed Rate FHA	5.34%	down 0.03%	6.31%	down 0.04%
15-Year Fixed Rate VA	5.79%	0.00%	6.12%	down 0.01%

Jumbo Loans:

PROGRAM	RATE	1W CHANGE	APR	1W CHANGE
30-Year Fixed Rate Jumbo	7.18%	up 0.01%	7.54%	down 0.03%
15-Year Fixed Rate Jumbo	6.66%	up 0.18%	6.88%	up 0.15%
7-year ARM Jumbo	7.53%	up 0.10%	7.70%	down 0.31%
5-year ARM Jumbo	7.47%	down 0.01%	7.93%	down 0.03%
3-year ARM Jumbo	—	0.00%	—	0.00%

APR stands for Annual Percentage Rate, which includes additional costs of the loan.

Note: Rates can change throughout the day.

30-Year Fixed vs. 5-Year ARM: A Crucial Comparison

The decision between a 30-year fixed-rate mortgage and a 5-year ARM is a big one. Here's a simplified breakdown:

Feature	30-Year Fixed	5-Year ARM
Interest Rate	Remains the same for the entire loan term.	Fixed for the first five years, then adjusts periodically.
Monthly Payments	Consistent and predictable.	Could change after the initial five-year period, depending on market conditions.
Predictability	High. You know exactly what your payments will be for the next 30 years.	Lower initially but unpredictable in the out years
Risk	Lower. You're protected from rising interest rates.	Higher. Your rate could increase significantly, especially in a rising-rate environment.
Best Suited For	Homebuyers who value stability, plan to stay in their home for the long term, and prefer predictable payments.	Homebuyers who plan to move or refinance within five years, are comfortable with some risk, and believe interest rates will fall or stay low after the initial period.

My Thoughts and Recommendations

Given the current economic climate, and the recent surge in the 5-year ARM, I personally would approach ARMs with caution. While the initial lower rate might seem attractive, the potential for future rate hikes could outweigh the benefits, especially since there's global uncertainty.

I believe that for most homebuyers, the peace of mind that comes with a fixed-rate mortgage is worth the slightly higher initial interest rate. Knowing your payments will remain stable for the next 15 or 30 years allows for better financial planning.

However, everyone's situation is different. If you are considering an ARM, make sure you:

• Understand the terms: Know how often the rate adjusts, what index it's based on, and what the rate caps are.
• Calculate the worst-case scenario: What would your payment be if the rate increased to its maximum allowed level? Can you still afford that?
• Have a plan: What will you do if rates rise? Refinance? Move?

Looking Ahead: What Could Influence Future Mortgage Rates?

Mortgage rates are influenced by a complex interplay of factors, including:

• Inflation: Rising inflation often leads to higher interest rates.
• Economic Growth: A strong economy can push rates up.
• Federal Reserve Policy: The Fed's decisions on interest rates have a direct impact on mortgage rates.
• Treasury Yields: Mortgage rates tend to track the yield on 10-year Treasury bonds.
• Global Events: Unexpected events can create economic uncertainty and impact interest rates.

I think it's important to stay informed about these factors and consult with a mortgage professional to get personalized advice based on your financial situation and risk tolerance. No advice can be perfectly planned, so keeping up to date and working with your mortgage company to predict and take preemptive measures can turn the scales in your favor.

The Bottom Line

The mortgage market is dynamic, and rates can change quickly. The recent increase in the 5-year ARM rate highlights the importance of understanding the different mortgage options available and carefully weighing the risks and benefits, especially in such unique economic times. Whether you opt for a fixed rate or an ARM, do your research, crunch the numbers, and make an informed decision that aligns with your financial goals and comfort level.