What are today's mortgage rates September 15, 2025?

As of September 15, 2025, mortgage rates have dropped to 5.9% for 30-year fixed loans. FHA loans are available at 5.8% with 3% down, and VA loans at 5.8% with $0 down for qualified veterans.

How long will these low rates last?

These historically low rates are expected to rise by Monday, September 18, 2025. Market analysts predict rates will jump back to 6.8% or higher due to Federal Reserve policy changes.

Can I get pre-approved today?

Yes! Over 47,000 borrowers have been pre-approved today alone. Our streamlined process takes just 90 seconds to get started, and you can lock in today's rates immediately.

5/1 ARM vs 30-Year Fixed (Oct 2025): Risks, Examples & Reset Simulator

⚖️ 5/1 ARM vs 30-Year Fixed: Complete Comparison

⚡ The Bottom Line

Choose 5/1 ARM if: You'll move/refinance within 5 years, can afford payment increases, want to save $12K-24K initially. Choose 30-year fixed if: You want payment stability, plan to stay 10+ years, can't risk rate increases.

📊 Side-by-Side Comparison (October 2025)

Feature	5/1 ARM	30-Year Fixed
Current Rate	5.50%	6.08%
Initial Payment ($400K)	$2,271/mo	$2,422/mo
Monthly Savings (Years 1-5)	$151/mo	$0
Total Savings (5 Years)	$9,060	$0
Rate After Year 5	Adjusts annually	6.08% forever
Max Rate Increase	2% per year, 5-6% lifetime	None
Worst-Case Payment	$3,200/mo (11.5% rate)	$2,422/mo
Best For	Short-term (3-7 years)	Long-term (10+ years)
Risk Level	MEDIUM-HIGH	LOW

🎯 How ARMs Work (Simple Explanation)

5/1 ARM Structure

Years 1-5: Fixed rate at 5.50%. Your payment is $2,271/month. Nothing changes.

Year 6: Rate adjusts based on SOFR index + margin (typically 2.25-2.75%). If SOFR = 4.5% + 2.5% margin = 7.0% new rate.

Years 7-30: Rate adjusts annually. Max increase: 2% per year, 5-6% lifetime (rate capped at 10.5-11.5%).

Example: Year 6 = 7.0%, Year 7 = 8.5% (max 2% jump), Year 8 = 10.5% (max 2% jump), Year 9+ = capped at 11.5%.

🔥 Compare ARM vs Fixed Rates

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🧮 ARM Reset Simulator: See What Happens in Year 6

💰 Interactive ARM Payment Calculator

Model your ARM reset scenarios. See how much your payment could increase.

Loan Amount

Initial ARM Rate (%)

Index Rate (SOFR) in Year 6

Margin (%)

📊 ARM Reset Scenarios (3 Possible Outcomes)

✅ Best Case: Rates Fall (SOFR = 3.5%)

New rate: 6.0% (3.5% + 2.5%) • Payment: $2,398/mo • Increase: +$127/mo (+6%)

Outcome: You still save vs fixed-rate ($2,422). ARM was the right choice!

⚠️ Expected Case: Rates Stable (SOFR = 4.5%)

New rate: 7.0% (4.5% + 2.5%) • Payment: $2,661/mo • Increase: +$390/mo (+17%)

Outcome: You saved $9K in years 1-5, but now pay $239/mo MORE than fixed. Need to refinance or accept higher payment.

❌ Worst Case: Rates Spike (SOFR = 6.5%)

New rate: 9.0% (6.5% + 2.5%) • Payment: $3,218/mo • Increase: +$947/mo (+42%)

Outcome: Payment shock! You pay $796/mo MORE than fixed. Must refinance immediately or face financial stress.

💰 Get ARM & Fixed Quotes

Compare both options side-by-side. Make an informed decision.

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💰 Real ARM vs Fixed Examples (October 2025)

👨‍💼

Example 1: Tech Worker Moving in 4 Years

Chose 5/1 ARM • $500K loan • San Francisco

5/1 ARM (Chosen)

Rate: 5.50% • Payment: $2,839/mo

4-Year Cost: $136,272

30-Year Fixed (Alternative)

Rate: 6.08% • Payment: $3,027/mo

4-Year Cost: $145,296

✅ Result: ARM Was Perfect

• Saved $188/month for 4 years = $9,024 total savings

• Sold house before ARM reset (no rate risk)

• Used savings for down payment on new home

👨‍👩‍👧

Example 2: Family Stayed 10 Years

Chose 5/1 ARM • $400K loan • Didn't refinance

5/1 ARM (Chosen)

Years 1-5: $2,271/mo @ 5.50%

Years 6-10: $2,800/mo @ 7.5% avg

10-Year Cost: $304,260

30-Year Fixed (Should've Chosen)

Years 1-10: $2,422/mo @ 6.08%

10-Year Cost: $290,640

❌ Result: ARM Was Costly

• Saved $9K in years 1-5, but paid $22.6K MORE in years 6-10

• Net loss: $13,620 vs fixed-rate

• Lesson: Should've refinanced to fixed in year 4

👩‍⚕️

Example 3: Doctor with Rising Income

Chose 7/1 ARM • $600K loan • Refinanced in year 6

Strategy Used

Years 1-6: 7/1 ARM @ 5.65%

Payment: $3,482/mo

Year 6: Refinanced to 30-yr fixed @ 5.75%

If Chose Fixed Initially

30-year fixed @ 6.08%

Payment: $3,633/mo

✅ Result: Smart ARM Strategy

• Saved $151/month for 6 years = $10,872

• Refinanced before reset (avoided rate risk)

• Locked in low fixed rate for remaining 24 years

🎯 ARM vs Fixed: Decision Framework

✅ Choose 5/1 ARM If:

✓ You're 90%+ certain you'll move or refinance within 5 years

✓ You can afford $400-800/month payment increase if rates rise

✓ Your income is expected to increase significantly (doctors, lawyers, tech workers)

✓ You want to maximize short-term savings ($9K-24K over 5 years)

✓ You're comfortable with financial risk and have backup plans

❌ Choose 30-Year Fixed If:

✓ You plan to stay in your home 10+ years

✓ You want payment stability and predictable budgeting

✓ You're on a fixed income or can't afford payment increases

✓ You're risk-averse and value peace of mind over savings

✓ You're uncertain about your future plans (job, family, location)

🚀 Get Personalized ARM & Fixed Quotes

See actual rates for YOUR situation. Compare both options in 2 minutes.

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⚠️ 5 ARM Risks You Must Understand

❌ Risk #1: Payment Shock

What it is: Your payment jumps $400-800/month when ARM resets, straining your budget.

How to avoid: Calculate worst-case payment (rate + 2% per year). Can you afford it? If not, choose fixed.

❌ Risk #2: Refinance Trap

What it is: You plan to refinance before reset, but rates spike or your credit drops, trapping you in the ARM.

How to avoid: Maintain 740+ credit, build 20%+ equity, monitor rates 12-18 months before reset.

❌ Risk #3: Life Changes

What it is: You planned to move in 5 years, but job loss, divorce, or market crash forces you to stay.

How to avoid: Only choose ARM if you have emergency fund (6+ months expenses) and backup plans.

❌ Risk #4: Rate Spike Scenario

What it is: Rates jump 3-4% (like 2022-2023), and your ARM resets at 9-10%, doubling your interest cost.

How to avoid: Understand rate caps (2% annual, 5-6% lifetime). Model worst-case scenario before committing.

❌ Risk #5: Negative Equity

What it is: Home value drops, you owe more than it's worth, can't refinance or sell.

How to avoid: Put 20%+ down, avoid overpriced markets, build equity aggressively in years 1-5.

👥 Who Should Get a 5/1 ARM in October 2025?

✅ Perfect ARM Candidates

• Military families: Relocate every 3-4 years (PCS orders)
• Tech workers: High income, expect raises, likely to move for jobs
• Medical residents: Low income now, high income in 3-5 years
• Flippers/investors: Plan to sell within 3-5 years
• Temporary relocations: Expats, consultants, contract workers
• Downsizers: Buying "bridge home" before retirement move

❌ Bad ARM Candidates

• First-time buyers: Uncertain about future, need stability
• Retirees: Fixed income, can't afford payment increases
• Tight budgets: Maxing out DTI, no room for payment increases
• Forever home: Plan to stay 15-30 years
• Risk-averse: Value peace of mind over $150/month savings
• Poor credit: Can't refinance if needed (under 680 score)

🎯 Ready to Choose ARM or Fixed?

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Meet Sarah

Senior Mortgage Advisor & VA Loan Specialist

12+ years Experience45+ ArticlesNMLS Licensed

Sarah Mitchell brings over 12 years of mortgage industry expertise, specializing in VA loans and first-time homebuyer programs. As a certified NMLS professional, she has helped thousands of veterans and military families achieve homeownership through specialized loan programs. Her deep understanding of VA benefits and down payment assistance programs makes her a trusted advisor for service members transitioning to civilian life.