NerdWallet is an advertising partner for some or all of the mortgage lenders on our site; however, this has no bearing on our ratings, lender star ratings, or the order in which lenders appear on the page. Our opinions are our own. Here is a list of our partners.
About These Rates: The lenders whose rates appear on this table are NerdWallet’s advertising partners. NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a lender’s site. The terms advertised here are not offers and do not bind any lender. The rates shown here are retrieved via the Mortech rate engine and are subject to change. These rates do not include taxes, fees, and insurance. Your creditworthiness and other factors will be evaluated by the partner to determine your actual rate and loan terms. Any potential savings figures are estimates based on the information provided by you and our advertising partners.
The current average rate for a 7-year ARM is 7.981% according to NerdWallet. This rate is higher than the average rate for a 30-year fixed-rate mortgage which is currently 7.317%. However, the 7-year ARM may be a good option for borrowers who plan to sell their home or refinance their mortgage within the next 7 years.
What is a 7-Year ARM?
A 7-year ARM is a type of adjustable-rate mortgage (ARM) that has an interest rate that is fixed for the first 7 years of the loan After the initial 7-year period, the interest rate can adjust every 6 months. The rate adjustments are tied to a benchmark interest rate index, such as the Secured Overnight Financing Rate (SOFR)
The 7-year ARM is a good option for borrowers who are comfortable with the risk of their interest rate increasing after the initial 7-year period. It can also be a good option for borrowers who plan to sell their home or refinance their mortgage within the next 7 years.
How to Qualify for a 7-Year ARM
To qualify for a 7-year ARM, you will need to have a good credit score and a low debt-to-income ratio. You will also need to make a down payment of at least 3%.
Pros and Cons of a 7-Year ARM
Pros:
- Lower initial interest rate than a 30-year fixed-rate mortgage
- Can be a good option for borrowers who plan to sell their home or refinance their mortgage within the next 7 years
Cons:
- Interest rate can increase after the initial 7-year period
- May not be a good option for borrowers who are not comfortable with the risk of their interest rate increasing
How to Find the Best 7-Year ARM Rates
The best way to find the best 7-year ARM rates is to shop around and compare rates from multiple lenders. You can use a mortgage comparison tool to help you compare rates.
The 7-year ARM can be a good option for borrowers who are comfortable with the risk of their interest rate increasing after the initial 7-year period. It can also be a good option for borrowers who plan to sell their home or refinance their mortgage within the next 7 years.
Additional Resources
Frequently Asked Questions
Q: What is the difference between a 7-year ARM and a 30-year fixed-rate mortgage?
A: The main difference between a 7-year ARM and a 30-year fixed-rate mortgage is that the interest rate on a 7-year ARM can adjust after the initial 7-year period. The interest rate on a 30-year fixed-rate mortgage will stay the same for the entire 30-year term of the loan.
Q: Who should consider getting a 7-year ARM?
A: A 7-year ARM may be a good option for borrowers who are comfortable with the risk of their interest rate increasing after the initial 7-year period. It can also be a good option for borrowers who plan to sell their home or refinance their mortgage within the next 7 years.
Q: How can I find the best 7-year ARM rates?
A: The best way to find the best 7-year ARM rates is to shop around and compare rates from multiple lenders. You can use a mortgage comparison tool to help you compare rates.
Q: What are the pros and cons of a 7-year ARM?
A: The pros of a 7-year ARM include a lower initial interest rate than a 30-year fixed-rate mortgage and the flexibility to sell your home or refinance your mortgage within the next 7 years. The cons of a 7-year ARM include the risk of your interest rate increasing after the initial 7-year period and the possibility that you may not be able to refinance your mortgage if interest rates rise.
Q: What is the current average rate for a 7-year ARM?
A: The current average rate for a 7-year ARM is 7.981%, according to NerdWallet.
7-year ARM mortgage rates
Whether you’re buying a house or refinancing, NerdWallet’s mortgage comparison tool can help you find affordable 7-year ARM rates right now. Enter information about the loan you’re looking for in the filters above to view rate quotes without disclosing personal information.
ARM glossary
- Index: The benchmark rate that yields the interest rate for each six-month period when added to the margin. As a reflection of the state of the market, the 30-day average secured overnight financing rate (SOFR) is used by most ARMs.
- Margin: The percentage point amount that the lender adds to the index to determine the interest rate that you will pay over the course of six months. As an illustration, consider an index rate of 5% plus a margin of 2%. Your interest rate would be 7 if you were to take 75 percentage points. 75%.
- Rate cap: The maximum amount that the interest rate on your loan may change each time it adjusts, both initially and subsequently.