Today’s Mortgage Rates: 5-Year ARM Jumps to 7.59% on June 29, 2025

Buying a home is a huge decision! When interest rates start moving, especially on adjustable-rate mortgages (ARMs), it can feel like navigating a maze. So, let's cut to the chase: According to Zillow, as of June 29, 2025, the average national rate for a 5-Year Adjustable Rate Mortgage has increased from 7.54% to 7.59%.

Today's Mortgage Rates: 5-Year ARM Jumps to 7.59% on June 29, 2025

Mortgage rates are constantly changing. It feels like you need a crystal ball to predict where they're headed next! These fluctuations are based on various economic factors, including inflation, the Federal Reserve's monetary policy, and overall market sentiment. It is important to keep an eye out for the changes so as to reap the benefits.

What's Happening with Mortgage Rates on June 29, 2025?

Let's take a look at the mortgage rates from Zillow as of today.

Loan Program	Rate	1 Week Change	APR	1 Week Change
Conforming Loans
30-Year Fixed Rate	6.76%	Down 0.16%	7.19%	Down 0.18%
20-Year Fixed Rate	6.32%	Down 0.26%	6.67%	Down 0.29%
15-Year Fixed Rate	5.75%	Down 0.21%	6.04%	Down 0.22%
10-Year Fixed Rate	5.78%	Down 0.15%	6.04%	Down 0.03%
7-Year ARM	7.29%	Down 0.15%	7.80%	Down 0.01%
5-Year ARM	7.59%	Up 0.39%	7.96%	Up 0.17%
3-Year ARM	—	0.00%	—	0.00%
Government Loans
30-Year Fixed Rate FHA	7.25%	Down 0.07%	8.30%	Down 0.06%
30-Year Fixed Rate VA	6.26%	Down 0.15%	6.44%	Down 0.16%
15-Year Fixed Rate FHA	5.58%	Down 0.01%	6.55%	Down 0.02%
15-Year Fixed Rate VA	5.73%	Down 0.19%	6.02%	Down 0.22%
Jumbo Loans
30-Year Fixed Rate Jumbo	7.09%	Down 0.18%	7.50%	Down 0.17%
15-Year Fixed Rate Jumbo	6.46%	Down 0.14%	6.71%	Down 0.14%
7-Year ARM Jumbo	7.42%	Down 0.10%	8.00%	Down 0.06%
5-Year ARM Jumbo	7.55%	Down 0.17%	7.94%	Down 0.15%
3-Year ARM Jumbo	—	0.00%	—	0.00%

Key Takeaways from Today's Mortgage Rate Update:

• 30-Year Fixed Mortgage Rates: The most popular 30-year fixed mortgage rate saw a slight increase of 1 basis point, climbing to 6.76%. This is still lower than the previous week’s average of 6.91%.
• 15-Year Fixed Mortgage Rates: The 15-year fixed mortgage rate remained stable at 5.75%.
• 5-Year ARM: This is the focus! The rate increased by 5 basis points, moving from 7.54% to 7.59%.

Diving Deeper: What is an Adjustable-Rate Mortgage (ARM)?

An ARM is a type of mortgage where the interest rate is fixed for an initial period, then adjusts periodically based on a benchmark index. The 5-year ARM has a fixed rate for the first five years. After that, the rate can change, typically annually, based on the market's performance, usually tied to indexes like the Secured Overnight Financing Rate, SOFR.

Why Are ARMs Attractive?

• Lower Initial Interest Rates: ARMs often start with lower interest rates than fixed-rate mortgages. This can result in lower monthly payments during the initial fixed-rate period.
• Ideal for Short-Term Homeownership: If you plan to move or refinance within the first five years, an ARM can be a smart choice. Since you're in the fixed-rate period, you benefit from the lower rate without worrying about adjustments.
• Potential Savings: If interest rates stay low or decrease after the fixed-rate period, you could save money over the life of the loan.

The Risks of ARMs

• Interest Rate Risk: The biggest risk is that interest rates could rise after the fixed-rate period. This would increase your monthly payments, potentially straining your budget.
• Payment Shock: If rates rise significantly, you could face a “payment shock” when your mortgage payment jumps substantially.
• Complexity: ARMs can be more complex than fixed-rate mortgages, making it harder to understand the terms and conditions.

Why Did the 5-Year ARM Rate Go Up?

Several factors could contribute to this increase:

• Economic Conditions: Positive economic data such as strong employment numbers or rising consumer confidence can indicate inflationary pressures, causing interest rates to rise.
• Federal Reserve Policy: The Federal Reserve's decisions on interest rates greatly influence mortgage rates. Any signals of tightening monetary policy usually lead to higher mortgage rates.
• Market Sentiment: Investor confidence and expectations about future economic conditions play a role. If investors anticipate higher inflation, they may demand higher yields on mortgage-backed securities, pushing mortgage rates up.

My Take: Weighing the Pros and Cons

I've seen many people benefit from ARMs over the years, but it's essential to be realistic about your financial situation and risk tolerance. A 5-year ARM can be a good option if the initial rate is substantially lower than a comparable fixed-rate mortgage and if you don't plan to stay in the home for more than five years.

However, I always advise people to consider the worst-case scenario. Can you afford higher monthly payments if interest rates go up significantly? Do you have a plan to refinance or sell the home before the rate adjusts? If you're unsure or uncomfortable with these risks, a fixed-rate mortgage might be a better choice.

Fixed vs. Adjustable: Choosing What's Right for You

Here is a comparison between Fixed Rate Mortgages and ARM

Feature	Fixed-Rate Mortgage	Adjustable-Rate Mortgage (ARM)
Interest Rate	Remains constant throughout the loan term.	Fixed for an initial period, then adjusts periodically.
Payment Stability	Predictable, consistent monthly payments.	Payments can change after the initial fixed-rate period.
Risk Level	Lower risk due to stable payments.	Higher risk due to potential rate increases.
Ideal For	Long-term homeowners who value stability and predictability.	Short-term homeowners or those expecting income growth.
Initial Rate	Can be higher than ARM's initial rate.	Often starts with a lower rate compared to fixed-rate mortgages.
Complexity	Simpler to understand.	More complex due to variable interest rates.

Other Mortgage Rate Trends

While the 5-year ARM saw an increase, it's worth noting that most other mortgage rates experienced slight decreases over the past week:

• 30-Year Fixed Rate: Decreased to 6.76%.
• 15-Year Fixed Rate: Remained steady at 5.75%.

This mixed bag of movements underscores the complexity of the current mortgage market.

The Bottom Line:

The slight increase in the 5-year ARM rate on June 29, 2025, is a snapshot of the ever-changing mortgage market. Stay informed, consider your personal circumstances, and seek expert advice to make smart choices whether you already have a mortgage or are looking to have one. Although the economy may feel like a game of chess, with careful planning and research you can strategically checkmate the perfect deal for you.