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3-year ARM rate chart
Adjust the graph below to see 3-year ARM rate trends tailored to your loan program, credit score, down payment and location.
Compare current 3-year ARM rates by loan type
The table below is updated daily with 3-year ARM rates for the most common types of home loans. Compare week-over-week changes to current adjustable-rate mortgages and annual percentage rates (APR). The APR includes both the interest rate and lender fees for a more realistic value comparison.
Conforming loans
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Government loans
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Jumbo loans
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Frequently asked questions about 3-year ARM
What is a 3-year ARM?
A 3-year ARM (adjustable-rate mortgage) is a home loan with a 30-year term that offers a fixed interest rate for the first 3 years then a variable interest rate for the remainder of the loan term.
3-year ARM rates explained
Rates on 3-year ARM loans are represented by two numbers separated by a slash, such as 3/6 ARM. The first number tells you how long the interest rate will stay the same (i.e. 3 years), and the second number following the slash represents how often the rate will be adjusted after the fixed period (i.e. every 6 months).
When rates adjust after the initial fixed period, the published index rate is added to the margin set by your lender to determine your new interest rate. Your lender will then recalculate your mortgage payments based on the new rate and balance without changing the term.
Most ARM loans have a maximum rate cap that limits the amount 3-year ARM rates can increase each adjustment period, as well as a lifetime cap over the loan term. You can find all the rate details about your 3-year ARM in the Loan Estimate your lender provides once you've applied for the mortgage.
What is a 3/1 ARM?
A 3/1 ARM used to be a type of 3-year adjustable-rate mortgage where the interest rate was fixed for the first 3 years and then adjusted annually for the remainder of its term. The now retired 3/1 ARM loans were based on a benchmark known as LIBOR (London Inter-Bank Offered Rate) that will cease to be published by 2023. Financial institutions have fully transitioned to a new benchmark interest rate known as SOFR (Secured Overnight Financing Rate), meaning all 3/1 ARM loans have been replaced by 3/6 ARM loans.
3/1 ARM vs 3/6 ARM
A 3/6 ARM is a type of 3-year adjustable-rate mortgage. Unlike a 3/1 ARM, rates on a 3/6 ARM readjust every 6 months after the first 3-year fixed period rather than annually. While both a 3/1 ARM and 3/6 ARM have a rate cap that limits how much the interest rate can change with each adjustment, 3/6 ARMs are limited to going up or down a maximum of one percentage point when they adjust every 6 months whereas 3/1 ARMs could go up or down a maximum of two percentage points each annual adjustment. That's because 3/6 ARMs are based on the new SOFR benchmark that replaced LIBOR and differs when it comes to margins, rate adjustment periods and interest rate caps.
3-year ARM rates vs 30-year fixed-rate mortgages
A 3-year ARM generally offers a fixed interest rate that is lower than 30-year fixed-rate mortgages for the first 3 years of the loan term. The lower initial rate may save you a considerable amount in interest over the first 3 years. However, after the fixed period, interest rates on 3-year ARMs are likely to increase whereas the rate on a 30-year fixed-rate mortgage will stay the same for the entire loan term.
Compare a 30-year fixed-rate mortgage with a 3.5% interest rate and a 3-year ARM loan with an initial interest rate of 3.0% on a $300,000 home with a 20% down payment. In the first 3 years, the borrower would save about $66 on their monthly mortgage payments with a 3-year ARM and almost $3,000 over the first 3 years of the loan. That savings could be used toward the principal to pay down more of the loan balance or be used toward closing costs if refinancing the mortgage after the first 3 years.
When should you consider a 3-year ARM?
The most ideal time to consider a 3-year ARM is when the APR on a comparable fixed-rate mortgage is high. The low introductory rates on a 3-year ARM can be an incentive for some home shoppers who are planning to sell or refinance after the first 3 years. If the value of the house increases before the fixed-rate period ends, you may be able to get a higher return. Keep in mind the housing market can be unpredictable. If considering a 3-year ARM, ask yourself:
- Am I prepared if the value of the house goes down instead of up?
- Am I prepared in the instance of a future financial hardship like a job loss or unexpected illness?
- If I can't refinance at a better rate or sell the home after 3 years, can I afford the maximum interest rate and monthly payment increase?
Before committing to a 3-year ARM, estimate how much you'll owe at the maximum interest rate so you don't risk defaulting on your home loan and severely impacting your credit .
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