- Adjustable-rate mortgages (ARMs) represented 8.5% of all mortgages in the first week of September, the highest level since June 2026.1
- The average rate for a 7/6 Secured Overnight Financing Rate (SOFR) ARM was 6.75% on September 16, 2026, while the average rate for a 30-year fixed home loan was 7.20%.2
- The recent increase in ARMs reflects a housing market where borrowers and real estate investors face affordability challenges and seek any advantage they can find.
As mortgage rates stay near their 2026 highs,3 more borrowers and real estate investors are opting for adjustable-rate mortgages (ARMs) to ease financial strain. In the first week of September, ARMs accounted for 8.5% of all mortgages, marking the highest proportion since June 2026.4 In this edition of Ameris Bank's Mortgage Monitor, we explore the potential implications of this trend for the housing market as we approach the final quarter of the year.
Shifting to a Home Loan with Lower Initial Rates
Rising living costs continue to affect household budgets, with recent increases reported across several consumer categories. As of August 2026, prices for food, energy, and gasoline have all risen compared to July 2026.5
Brett Hively, Senior Vice President and Mortgage Capital Markets and Financial Strategist at Ameris Bank, stated that adjustable-rate mortgages (ARMs) can be beneficial in today's uncertain economic environment. "The appeal of ARMs lies in their lower initial interest rates and reduced monthly payments compared to fixed-rate mortgages," said Hively. "ARMs may offer lower initial payments but future payments could increase when the adjustment period begins."
Short-Term Financial Strategy
ARMs might be advantageous for homebuyers who plan to move or sell within the introductory period, such as five or seven years, or who plan to refinance into a fixed-rate mortgage. Hively expressed that homebuyers should view ARMs as a short-term financial strategy and consider numerous factors before moving forward.
"Homebuyers should evaluate their current and anticipated future income along with their budget, Hively said, adding "It’s important to take into account possible changes, such as career advancements or family expenses like college tuition, as well as the effects of inflation. Additionally, buyers should estimate their future financial capacity in relation to mortgage rate limits."
Refinancing From an ARM to a Fixed-Rate Mortgage
Homeowners who initially secured adjustable-rate mortgages and plan to remain in their homes long term may choose to refinance to a fixed-rate loan. "By refinancing, owners can benefit from predictable monthly payments and protection against potential increases in interest rates," said Hively. "This move can provide financial stability and peace of mind, especially in an environment where interest rates can fluctuate."
Sources:
1, 4 https://qz.com/adjustable-rate-mortgage-demand-fixed-rates-14-month-high-090926
2 https://www.mortgagenewsdaily.com/mortgage-rates
3 https://www2.optimalblue.com/obmmi
5 https://www.bls.gov/news.release/pdf/cpi.pdf
