US 5-Year ARM Basics Buyers Need

A 5-year ARM keeps the same interest rate for the first five years, then adjusts periodically based on broader market changes afterward.
These loans usually start below fixed-rate pricing, but after five years they can reset every six months, potentially raising both interest costs and payments.
Each adjustment uses a benchmark index plus a fixed lender margin. That benchmark typically strengthens with a stronger economy and eases in weaker periods.
Lenders may also call this a 5/6 ARM: five years fixed, then resets every six months. That format is the most popular ARM.
A 5-year ARM can fit people planning to refinance or sell before the fixed period ends, and rate caps limit later payment swings.