Best 3/1 ARM Mortgage Rates May 2026 | As Low As 4.50%
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Brian McKay
iEditorial Disclosure
Brian McKay
Brian McKay
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Today's 3/1 ARM mortgage market includes offers such as Actors Federal Credit UnionActors Federal Credit Union165 W 46th St, Chicago, CA 10036 1308B+4.8 ★Texas Ratio: 17.91% offering 3/1 ARM at 4.50%, and 802 Credit Union802 Credit Union105 Westminster St, Barre, VT 05001 4720A+5.0 ★Texas Ratio: 5.91% offering 3/1 ARM at 4.50%, and Alabama Credit UnionAlabama Credit Union1 Mercedes Dr, Birmingham, AL 32507 8703A5.0 ★Texas Ratio: 6.17% offering 3/1 ARM, First Mortgage at 5.00%, and SPECTRASPECTRA1024 Saint Nicholas Dr, Alexandria, DC 20375 0001A+5.0 ★Texas Ratio: 0.00% offering 3/1 ARM at 5.25%, and Aim Credit UnionAim Credit Union1200 Associates Dr, Burlington, IA 52001A+5.0 ★Texas Ratio: 5.45% offering 3/1 Year ARM at 5.25%.
A 3/1 ARM offers a fixed interest rate for the first 3 years, then adjusts annually based on a market index. It typically carries a lower initial rate than 30-year fixed mortgages, making it well suited for borrowers who plan to sell or refinance before the adjustment period begins.
3/1 ARM rates reflect the initial fixed-rate period. Your rate will adjust after 3 years based on market conditions. Last Updated and Verified: May 7, 2026
Compare 3/1 ARM Mortgage Rates Today
Source: Verified Mortgage Rate Data provided by MonitorBankRates.com
Lender
Product
Term
Rate ▲
APR
Profile
Actors Federal Credit Union
Institution Rating:
B+4.8 ★Texas Ratio: 17.91%
Chicago, CA
3/1 ARM
4.50%
4.61%
▼
Rate4.50%
APR4.61%
Points0.000
UpdatedMay 7, 2026
Details
No additional details available.
802 Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 5.91%
Barre, VT
3/1 ARM
3/1 ARM
4.50%
4.65%
▼
Rate4.50%
APR4.65%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
Alabama Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 6.17%
Birmingham, AL
3/1 ARM, First Mortgage
5.00%
5.06%
▼
Rate5.00%
APR5.06%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
Rate5.25%
APR5.29%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
Aim Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 5.45%
Burlington, IA
3/1 Year ARM
5.25%
5.34%
▼
Rate5.25%
APR5.34%
Points0.000
UpdatedApr 19, 2026
Details
No additional details available.
Investment Savings Bank
Institution Rating:
A+5.0 ★Texas Ratio: 0.00%
Altoona, PA
3/1 ARM
5.00%
5.51%
▼
Rate5.00%
APR5.51%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
Homebase Federal Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 6.30%
Chester, VA
3/1 ARM
4.75%
5.62%
▼
Rate4.75%
APR5.62%
Points0.000
UpdatedMay 6, 2026
Details
No additional details available.
Mission Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 0.89%
Carlsbad, CA
3/1 ARM
5.50%
5.68%
▼
Rate5.50%
APR5.68%
Points0.000
UpdatedMay 7, 2026
Details
No additional details available.
UMassFive College Federal Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 7.35%
Amherst, MA
3/1 ARM
5.75%
5.84%
▼
Rate5.75%
APR5.84%
Points0.000
UpdatedMay 7, 2026
Details
No additional details available.
Vermont Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 3.42%
Barre, VT
3/1 ARM
5.12%
5.86%
▼
Rate5.12%
APR5.86%
Points0.000
UpdatedMay 7, 2026
Details
No additional details available.
Northwest Plus Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 4.75%
Arlington, WA
3/1 ARM
30 Year
5.75%
5.87%
▼
Rate5.75%
APR5.87%
Points0.500
UpdatedApr 19, 2026
Details
No additional details available.
Members First Credit Union of NH
Institution Rating:
A+5.0 ★Texas Ratio: 4.15%
Bedford, NH
3/1 Year ARM
360
5.75%
5.88%
▼
Rate5.75%
APR5.88%
Points0.000
UpdatedApr 19, 2026
Details
As Low As
Forte Bank
Institution Rating:
A+5.0 ★Texas Ratio: 0.80%
Hartford, WI
3/1 ARM
3 Years
5.50%
5.88%
▼
Rate5.50%
APR5.88%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
MCS Bank
Institution Rating:
A5.0 ★Texas Ratio: 7.07%
Allensville, PA
3/1 Adjustable
3
5.75%
5.88%
▼
Rate5.75%
APR5.88%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
Fox Valley Savings Bank
Institution Rating:
A+5.0 ★Texas Ratio: 2.02%
Fond Du Lac, WI
3/1 Adjustable-Rate Mortgage
5.95%
5.95%
▼
Rate5.95%
APR5.95%
Points0.000
UpdatedMay 5, 2026
Details
As Low As
Proponent Federal Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 6.01%
Burlington, NC
3/1
30-Year Term
5.25%
5.99%
▼
Rate5.25%
APR5.99%
Points0.000
UpdatedApr 18, 2026
Details
Fixed for 3 years and then adjusts yearly.
Cloverbelt Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 0.71%
Wausau, WI
3/1 ARM
360
5.75%
6.06%
▼
Rate5.75%
APR6.06%
Points0.000
UpdatedApr 19, 2026
Details
No additional details available.
Northwest Plus Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 4.75%
Arlington, WA
Conventional - Owner Occupied 3/1 ARM
30 Year
6.00%
6.12%
▼
Rate6.00%
APR6.12%
Points0.500
UpdatedApr 19, 2026
Details
No additional details available.
Saco & Biddeford Savings
Institution Rating:
A+5.0 ★Texas Ratio: 4.27%
Biddeford, ME
Adjustable Rate Mortgage (ARM)5 3/1 Year ARM: 15 years or less
15 years or less
5.88%
6.15%
▼
Rate5.88%
APR6.15%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
Picatinny Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 2.66%
Denville, NJ
3/1 Year ARM Mortgage
30 years
5.62%
6.18%
▼
Rate5.62%
APR6.18%
Points0.000
UpdatedMay 6, 2026
Details
No additional details available.
Union County Savings Bank Elizabeth, NJ
Institution Rating:
A+5.0 ★
Cranford, NJ
3/1/30 ARM
5.88%
6.19%
▼
Rate5.88%
APR6.19%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
Charter Oak Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 2.12%
Dayville, CT
Adjustable Rate Mortgages 3/1 ARM
5.38%
6.19%
▼
Rate5.38%
APR6.19%
Points0.000
UpdatedMay 6, 2026
Details
No additional details available.
Landmark Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 3.95%
Beaver Dam, WI
3 Year ARM
3
5.38%
6.19%
▼
Rate5.38%
APR6.19%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
Tower Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 1.36%
Annapolis, MD
3 Year ARM
5.25%
6.20%
▼
Rate5.25%
APR6.20%
Points0.000
UpdatedMay 2, 2026
Details
As Low As
Stoughton Co-operative Bank
Institution Rating:
A+5.0 ★Texas Ratio: 1.54%
Stoughton, MA
3 Year ARM 2/6 Caps
30 Years
5.38%
6.20%
▼
Rate5.38%
APR6.20%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
Tower Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 1.36%
Annapolis, MD
3 Year ARM
5.00%
6.23%
▼
Rate5.00%
APR6.23%
Points1.000
UpdatedMay 2, 2026
Details
As Low As
Silverado Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 0.68%
Angwin, CA
2nd Deed 3/1/30 Year - 1Yr. TCM
360
6.25%
6.25%
▼
Rate6.25%
APR6.25%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
Heritage Community Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 5.33%
Fair Oaks, CA
3/1 ARM
5.38%
6.31%
▼
Rate5.38%
APR6.31%
Points1.000
UpdatedMay 2, 2026
Details
No additional details available.
Community 1st Credit Union Ottumwa, IA
Institution Rating:
B-4.3 ★Texas Ratio: 23.52%
Albia, IA
3/1 ARM
5.62%
6.38%
▼
Rate5.62%
APR6.38%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
NCB North Cambridge Coopertive Bank
Institution Rating:
A+5.0 ★Texas Ratio: 0.00%
Cambridge, MA
3/1 Year Adjustable
5.75%
6.41%
▼
Rate5.75%
APR6.41%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
GARDEN SAVINGS
Institution Rating:
A+5.0 ★Texas Ratio: 0.00%
Brick, NJ
3/3 Year ARM
30 Years
5.75%
6.42%
▼
Rate5.75%
APR6.42%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
Saco & Biddeford Savings
Institution Rating:
A+5.0 ★Texas Ratio: 4.27%
Biddeford, ME
Adjustable Rate Mortgage (ARM)5 3/1 Year ARM: 16 to 30 years
16 to 30 years
5.99%
6.44%
▼
Rate5.99%
APR6.44%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
IDB Global Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 0.99%
Washington, DC
3/1 ARM
5.38%
6.44%
▼
Rate5.38%
APR6.44%
Points0.000
UpdatedMay 7, 2026
Details
Initial Fixed Period (First 3 Years)
BMI Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 3.43%
Columbus, OH
3/1 ARM
360
5.25%
6.45%
▼
Rate5.25%
APR6.45%
Points0.000
UpdatedMay 6, 2026
Details
No additional details available.
Langley Federal Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 11.01%
Carrollton, NC
3/1 Adjustable Rate Mortgage
5.50%
6.46%
▼
Rate5.50%
APR6.46%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
Ardent Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 4.56%
Blue Bell, PA
3/1 ARM
6.00%
6.48%
▼
Rate6.00%
APR6.48%
Points0.000
UpdatedMay 7, 2026
Details
As Low As
Landmark Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 3.95%
Beaver Dam, WI
3 Year ARM
6.50%
6.48%
▼
Rate6.50%
APR6.48%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
Parke Bank
Institution Rating:
A5.0 ★Texas Ratio: 6.65%
Collingswood, NJ
30 Year 3/1 ARM Conforming
30 Year
5.75%
6.50%
▼
Rate5.75%
APR6.50%
Points0.000
UpdatedMay 4, 2026
Details
Introductory Rate
Third Federal Savings and Loan
Institution Rating:
A+5.0 ★Texas Ratio: 1.96%
Avon, FL
3/1 ARM (30 year)
5.84%
6.52%
▼
Rate5.84%
APR6.52%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
Third Federal Savings and Loan
Institution Rating:
A+5.0 ★Texas Ratio: 1.96%
Avon, FL
3/1 ARM (30 year)
5.84%
6.54%
▼
Rate5.84%
APR6.54%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
New Foundation SB
Institution Rating:
A+5.0 ★Texas Ratio: 2.89%
Cincinnati, OH
3/1 ARM
6.50%
6.58%
▼
Rate6.50%
APR6.58%
Points0.000
UpdatedMay 5, 2026
Details
floor rate
Firefighters First Federal Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 1.58%
Bakersfield, AZ
3/1 ARM
30 years
6.12%
6.59%
▼
Rate6.12%
APR6.59%
Points0.000
UpdatedMay 2, 2026
Details
Fixed for 3 years, variable for the next 27 years (adjusts annually).
Third Federal Savings and Loan
Institution Rating:
A+5.0 ★Texas Ratio: 1.96%
Avon, FL
3/1 ARM (30 year) Low Cost
6.14%
6.59%
▼
Rate6.14%
APR6.59%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
Third Federal Savings and Loan
Institution Rating:
A+5.0 ★Texas Ratio: 1.96%
Avon, FL
3/1 ARM (30 year) Low Cost
6.14%
6.60%
▼
Rate6.14%
APR6.60%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
City of Boston Credit Union
Institution Rating:
A-5.0 ★Texas Ratio: 14.75%
Boston, MA
7/23 Year ARM (Adjustable Rate)
360
6.50%
6.61%
▼
Rate6.50%
APR6.61%
Points0.000
UpdatedApr 19, 2026
Details
No additional details available.
FNB of Waterloo
Institution Rating:
A+5.0 ★Texas Ratio: 2.35%
Collinsville, IL
3 Year ARM
6.00%
6.61%
▼
Rate6.00%
APR6.61%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
Third Federal Savings and Loan
Institution Rating:
A+5.0 ★Texas Ratio: 1.96%
Avon, FL
3/1 ARM (30 year) Low Cost
6.19%
6.62%
▼
Rate6.19%
APR6.62%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
American Broadcast Employees Federal Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 9.22%
Bristol, CA
3/1 Yr ARM
15 or 30 Years
5.75%
6.62%
▼
Rate5.75%
APR6.62%
Points0.000
UpdatedApr 18, 2026
Details
Up to $806,500
Michigan State University Federal Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 9.68%
Algonquin, IL
Vacant Land Lot 3/1
3/1
6.75%
6.67%
▼
Rate6.75%
APR6.67%
Points0.000
UpdatedMay 7, 2026
Details
As Low As
Michigan State University Federal Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 9.68%
Algonquin, IL
Vacant Land Lot 3/1
3/1
6.75%
6.72%
▼
Rate6.75%
APR6.72%
Points0.000
UpdatedMay 7, 2026
Details
As Low As
American Broadcast Employees Federal Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 9.22%
Bristol, CA
3/1 Yr ARM
15 or 30 Years
6.25%
6.73%
▼
Rate6.25%
APR6.73%
Points0.000
UpdatedApr 18, 2026
Details
Over $806,500
Third Federal Savings and Loan
Institution Rating:
A+5.0 ★Texas Ratio: 1.96%
Avon, FL
3/1 ARM (30 year) Low Cost
6.64%
6.75%
▼
Rate6.64%
APR6.75%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
Port Washington State Bank
Institution Rating:
A+5.0 ★Texas Ratio: 2.20%
Belgium, WI
3/1 Adjustable Rate Mortgage
6.88%
6.84%
▼
Rate6.88%
APR6.84%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
CO-OP Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 3.80%
Black River Falls, WI
3/1 ARM
5.74%
6.89%
▼
Rate5.74%
APR6.89%
Points0.000
UpdatedApr 19, 2026
Details
No additional details available.
Port Washington State Bank
Institution Rating:
A+5.0 ★Texas Ratio: 2.20%
Belgium, WI
Vacant Land - 3 year ARM
6.99%
6.96%
▼
Rate6.99%
APR6.96%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
Members First Credit Union of NH
Institution Rating:
A+5.0 ★Texas Ratio: 4.15%
Bedford, NH
Seasonal Property 3/1 ARM
360
7.00%
7.34%
▼
Rate7.00%
APR7.34%
Points2.000
UpdatedApr 19, 2026
Details
As Low As
State Bank of Chilton
Institution Rating:
A5.0 ★Texas Ratio: 8.77%
Brillion, WI
3/1 Adjustable-Rate Mortgage
5.75%
7.42%
▼
Rate5.75%
APR7.42%
Points0.000
UpdatedMay 5, 2026
Details
No additional details available.
Fort Community Credit Union
Institution Rating:
A5.0 ★Texas Ratio: 6.90%
Fort Atkinson, WI
3/1 ARM
6.25%
7.56%
▼
Rate6.25%
APR7.56%
Points0.000
UpdatedApr 19, 2026
Details
80% LTV or Less
Argentine Federal Savings
Institution Rating:
A5.0 ★Texas Ratio: 10.78%
Kansas City, KS
3/1 Arm
7.35%
7.57%
▼
Rate7.35%
APR7.57%
Points0.000
UpdatedMay 4, 2026
Details
No additional details available.
Country Bank for Savings
Institution Rating:
A5.0 ★Texas Ratio: 7.70%
Belchertown, MA
Building Lot (15 Year) 3/1 ARM
7.25%
7.65%
▼
Rate7.25%
APR7.65%
Points0.000
UpdatedMay 5, 2026
Details
20% down is required; Margin 4.000%
Achieva Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 1.90%
Bradenton, FL
3/1 Vacant Land Loan
6.25%
7.71%
▼
Rate6.25%
APR7.71%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
802 Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 5.91%
Barre, VT
3/1 ARM
3/1 ARM
7.50%
7.72%
▼
Rate7.50%
APR7.72%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
Country Bank for Savings
Institution Rating:
A5.0 ★Texas Ratio: 7.70%
Belchertown, MA
Raw Land (10 Year) 3/1 ARM
8.25%
8.63%
▼
Rate8.25%
APR8.63%
Points0.000
UpdatedMay 5, 2026
Details
40% down is required; Margin 5.000%
802 Credit Union
Institution Rating:
A+5.0 ★Texas Ratio: 5.91%
Barre, VT
3/1 ARM
3/1 ARM
8.50%
8.79%
▼
Rate8.50%
APR8.79%
Points0.000
UpdatedMay 2, 2026
Details
No additional details available.
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MonitorBankRates
The 3/1 ARM rates displayed are verified and sourced directly from the official websites of the listed financial institutions. ARM rates will adjust after the initial fixed period.
Banks and Credit Unions: If you need to update your rate data or request removal from MonitorBankRates.com, please contact us here.
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3/1 ARM Mortgage Rate Trend
Daily national average rates across all mortgage types
Daily mortgage rate averages compiled from our database of 8,500+ banks and credit unions — updated daily.
3/1 ARM — National Avg
6.383%
▲ 0.165% from last week
The 3/1 ARM rate rose 0.165 points over the past 7 days to 6.383%, up from 6.218% last week.
Quick Reference — May 2026
Est. payment ($400k loan): $2,498/mo
Loan type: 3/1 ARM (adjustable after 3 years)
Best for: Lower initial rate, short-term homeowners
Data source: 8,500+ lenders verified daily
As of May 8, 2026 • Daily averages from our database of 8,500+ U.S. banks & credit unions — updated daily
Powered by MonitorBankRates
ARM Mortgage Calculators
Methodology & Data Sources
Direct-Sourced & Verified Rate Data: Every 3/1 ARM rate on this page is sourced directly from the official website of the lending institution. Adjustable-rate mortgage rates reflect the initial fixed-rate period and are verified daily.
Nationwide Lender Coverage: Our database monitors over 8,500 banks and credit unions across all 50 states, capturing a diverse mix of community credit unions, regional banks, and national online lenders. This breadth ensures you see competitive rates that many national rate surveys miss.
Time-Stamped for Full Transparency: Because 3/1 ARM rates can shift multiple times per week in response to economic conditions and Federal Reserve policy changes, every rate entry carries its own specific "last updated" date. You always know exactly how fresh the data is.
Proprietary Lender Safety Ratings: Rate alone is only part of the picture. MonitorBankRates evaluates the financial stability of every listed institution using regulatory FDIC and NCUA data. Our composite Health Grades (A+ to F), Star Ratings, and Texas Ratio calculations give you a clear view of lender stability so you can borrow with confidence from a financially sound institution.
Frequently Asked Questions About 3/1 ARM Rates
What is a 3/1 ARM?
A 3/1 ARM (Adjustable-Rate Mortgage) has a three-year initial fixed-rate period, after which the interest rate adjusts once per year for the remaining loan term. The "3" refers to the number of years the rate is fixed; the "1" means the rate can change every year after that. During the fixed period, your principal and interest payment stays the same. After year three, it adjusts annually based on a financial index — typically SOFR — plus a lender margin. The 3/1 ARM offers the lowest initial rate of the standard conforming ARM options.
How does the rate adjustment work after the 3-year fixed period?
After the initial fixed period, the rate resets annually. The new rate equals the current value of a benchmark index — most commonly the Secured Overnight Financing Rate (SOFR) — plus a fixed margin set by the lender at origination (typically 2.5%–3.0%). For example, if SOFR is 4.50% and the margin is 2.75%, your adjusted rate would be 7.25%, subject to any applicable rate caps. The margin never changes; only the index value fluctuates.
What are rate caps on a 3/1 ARM?
Rate caps limit how much your interest rate can change at each adjustment and over the life of the loan. Most conforming 3/1 ARMs use a 2/2/5 cap structure: the first adjustment after the fixed period is capped at 2% above the initial rate, each subsequent annual adjustment is also capped at 2%, and the lifetime cap is 5% above the start rate. So if your initial rate is 6.00%, your rate can never exceed 11.00%. Always confirm the specific cap structure in your Loan Estimate before closing.
Who is a 3/1 ARM best suited for?
The 3/1 ARM is best for borrowers who are highly confident they will sell, refinance, or pay off the loan within three years. Common scenarios include buyers purchasing a starter home with a clear upgrade plan, professionals on short-term assignments or relocation packages, and investors with a defined short hold period. Because rate adjustments begin after just 36 months, the 3/1 carries real rate risk for anyone who stays beyond the fixed period — it is not suitable for borrowers without a solid short-term exit plan.
How does a 3/1 ARM compare to a 5/1 or 7/1 ARM?
The core trade-off across ARM terms is initial rate versus rate certainty. The 3/1 ARM offers the lowest starting rate but adjustments begin soonest. The 5/1 ARM provides two additional years of stability for a marginally higher rate, while the 7/1 ARM locks in the rate for seven years at the highest initial rate of the three options. If you are certain you will exit within three years, the 3/1 maximizes savings. If your timeline is uncertain, the extra certainty of a 5/1 or 7/1 is typically worth the small rate premium.
How does a 3/1 ARM compare to a 30-year fixed mortgage?
A 3/1 ARM typically starts 0.50%–1.50% below a comparable 30-year fixed mortgage, which on a $400,000 loan translates to roughly $130–$390 in monthly savings during the fixed period. If you sell or refinance before year three, you capture those savings with no rate risk. If you stay longer and rates have risen, your payment increases. The decision depends entirely on how long you plan to keep the loan: for stays under three years, the 3/1 ARM often wins on cost; beyond that, the fixed rate provides valuable insurance against rising rates.
What happens if I stay in the loan past the 3-year fixed period?
If you remain in the loan past year three, the rate adjusts annually based on the then-current SOFR index plus your margin. Depending on where rates are at that time, your payment could rise, stay flat, or even decrease. The rate caps limit the maximum increase at each adjustment and over the life of the loan, but payment changes can still be meaningful on a large balance. Most borrowers in this situation refinance into a new fixed-rate or ARM product to regain predictability.
What is the difference between interest rate and APR on a 3/1 ARM?
The interest rate is your fixed borrowing cost for the first three years. The APR on an ARM is calculated using the initial rate, projected future adjustments (based on current index levels at origination), and all applicable fees — annualized across the full loan term. Because it must project adjustments that have not yet occurred, the ARM APR is less certain than a fixed-loan APR. It is still useful for comparing all-in costs across lenders, but evaluate it alongside the initial rate, margin, and cap structure.
How are 3/1 ARM rates determined?
Lenders price 3/1 ARM rates primarily based on the 3-year U.S. Treasury yield and current SOFR levels, adding a spread for credit risk, servicing costs, and profit margin. Because the 3/1 ARM is a conforming loan eligible for sale to Fannie Mae and Freddie Mac, its pricing is heavily influenced by secondary market demand for adjustable-rate mortgage-backed securities. Your individual rate also reflects credit score, down payment, loan-to-value ratio, property type, and market conditions at the time of rate lock.
What are today's best 3/1 ARM rates?
- Actors Federal Credit Union: 4.50% (3/1 ARM)
- 802 Credit Union: 4.50% (3/1 ARM)
- Alabama Credit Union: 5.00% (3/1 ARM, First Mortgage)
- SPECTRA: 5.25% (3/1 ARM)
- Aim Credit Union: 5.25% (3/1 Year ARM)
30-Year Fixed rates reflect actual verified offers from lenders actively lending to borrowers nationally. Your final approved rate will depend on your credit profile, loan-to-value ratio, and daily market movements. Last Updated: May 7, 2026
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