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A year ago at this time, the 15-year FRM averaged 3.87%. 5-year treasury-indexed hybrid adjustable-rate mortgage (arm) averaged 3.66% with an average 0.4 point, down from last week when it averaged.
As an example, on a $200,000 30-year fixed-rate mortgage, the average rate would translate to a monthly mortgage payment (principal and interest) of $975. On the other hand, the 5/1 ARM would have an initial payment amount of $863 — a savings of more than $100 per month.
How 5/1 ARM Rates Stack Up Against Other Mortgage Rates. A 5/1 ARM at 3.55% interest for the same home price and down payment totals to about $994 per month for principal and interest. That equals a difference of $56 per month, which may not seem that dramatic, but per year that means a savings of $672.
July 22,2019 – Compare Interest Only: 5/1 year arm mortgage rates from lenders in Washington. Mortgage rates are updated daily. Sort by APY, monthly payment, points, and more.
Put simply, the 5/1 ARM is an adjustable-rate mortgage with a 30-year loan term that’s fixed for the first five years and adjustable for the remaining 25 years. So during years one through five, the interest rate never changes. If it starts at 4%, it remains at 4% for 60 months.
The popular product has eked out a weekly increase only once in 2019. The 15-year adjustable-rate mortgage averaged 3.78%, down three basis points. The 5-year Treasury-indexed hybrid adjustable-rate.
Teaser rates on a 5-year mortgage are higher than rates on 1 or 3 year ARMs, but they’re generally lower than rates on a 7 or 10 year ARM or a 30-year fixed rate mortgage. A 5-year could be a good choice for those buying a starter home who want to increase their buying power and are planning to trade up in.
5/1 ARM – the rate is fixed for a period of 5 years after which in the 6th year the loan becomes an adjustable rate mortgage (ARM). The adjustable rate is either tied to the 1-year treasury index or to the one-year London Interbank offered rate (“libor“), and is added to a pre-determined margin (usually between 2.25-3.0%) to arrive at your new monthly rate.