Mortgage rates are mixed today, Thursday, August 27, 2026, with some loan rates moving higher and others falling. The biggest change is in the 5/1 adjustable-rate mortgage (ARM), which has become cheaper compared with the previous day.
The 30-year fixed mortgage rate is 6.57% today, up 4 basis points from Wednesday. This means borrowers choosing a traditional 30-year fixed loan are paying a slightly higher rate than they were a day earlier, according to Zillow data reported by Yahoo Finance. The 5/1 ARM rate is 6.35%, down 21 basis points from yesterday. That makes the ARM rate 0.22 percentage points lower than the 30-year fixed rate today.
The answer mainly depends on how long you expect to stay in the home and how comfortable you are with future rate changes. After that period, the rate can change at set intervals based on the terms of the loan. ARM mortgage Rate caps provide some protection for ARM borrowers. The interest rate stays locked for the entire loan term, which gives borrowers more predictable principal and interest payments. A borrower does not have to worry about the mortgage interest rate suddenly increasing after five years. The lower starting rate should not be treated as a guarantee of lower costs throughout the entire mortgage.
This creates a key choice for homebuyers: Should you take the lower 6.35% ARM rate or pay more for the stability of a 6.57% fixed mortgage? A 5/1 ARM starts with a fixed interest rate for the first five years. A 30-year fixed mortgage works differently. The 6.57% fixed rate is higher than today’s 6.35% ARM rate, but the extra cost comes with more certainty. A borrower choosing the 6.35% ARM should be financially prepared for the possibility of a higher payment later. A borrower choosing the 6.57% fixed loan is paying for stability.
Because of these caps, but a significant increase can still put pressure on a household budget, mortgage broker Travis Erickson of Bonelli Financial Group said ARM loans have a maximum rate. Because of future market movements, the initial rate is higher, but the interest rate will not change. These caps limit how much the interest rate can increase at each adjustment and how much it can rise over the life of the loan, according to USA Today.
ARM rates are generally linked to a benchmark or index. For example, a lender may use the Secured Overnight Financing Rate (SOFR) and add a fixed percentage called the margin to determine the new rate. If the underlying index rises, the ARM’s interest rate can rise too. If the index falls, the rate can also fall, although the exact changes depend on the loan agreement.
Your monthly principal and interest payment can rise or fall when the ARM rate changes, according to USA Today.
