The ARM Index

As of 2026-08-24, the 30-day average SOFR — the index most new adjustable-rate mortgages adjust on — is 3.645%. An ARM's rate after its fixed period is that index plus the loan's fixed margin, rounded to the nearest eighth, subject to its caps — for example, an illustrative Ralo 5/6 ARM carries a 2.75% margin, so adjusting today would mean 6.375% before caps. The numbers below — index, margins, caps, fully-indexed rates, and official APOR benchmarks per ARM family — are the ones that actually decide what an ARM costs after the teaser years, and they are rarely published side by side.

How an ARM adjustment is computed

After the fixed period, the rate resets every adjustment period (six months on modern 5/6, 7/6, and 10/6 ARMs) to index + margin, rounded to the nearest eighth of a percent. The index floats with the market — for new agency loans it is the 30-day average SOFR published by the New York Fed. The margin is fixed in your note the day you close and never changes. Caps then bound each move: a first-adjustment cap, a per-adjustment cap, and a lifetime cap over the start rate. Every number you need to compute your own worst case is in your note; the current index is below.

National ARM pricing by family (survey of 2026-08-20)

Sources: FFIEC/CFPB rate-spread survey table (rates, points & fees, fully-indexed rates) and Average Prime Offer Rates; 30-day average SOFR from the Federal Reserve Bank of New York (2026-08-24).

A real ARM, opened up

An illustrative Ralo 5/6 ARM (CA, priced August 25, 2026): start rate 5.375%, margin 2.75%, caps 2%/1%/5%, fully-indexed rate 6.375%, composite APR 6.002% (modeled per Regulation Z using the current SOFR index). The lifetime worst case is start rate + lifetime cap: 10.375% — run your budget against that number, not the teaser.

Deciding between an ARM and a fixed loan? The honest comparison is the fixed-period savings against the capped worst case — fixed vs ARM, compared, and what to do when you already hold a low rate. Machine-readable: arm-index.csv. Rates are illustrative examples, not a loan approval, rate lock, or commitment. Actual rates depend on credit score, LTV, occupancy, lock period, and loan amount. Ralo is an automated mortgage broker — not a lender — available where licensed: California, Colorado, and Texas.

The Questions Everyone Asks

What will my ARM adjust to?

Index plus margin, rounded to the nearest eighth, then capped. Find the margin and caps in your note (or Loan Estimate), take the current 30-day average SOFR, add the margin, and apply the first-adjustment cap against your current rate. Your servicer must also send advance notice before each adjustment.

What is a fully-indexed rate?

The index plus the margin with no caps applied — what the ARM would cost today if it were adjusting freely. Comparing the fully-indexed rate with the start rate shows how much of the ARM’s advertised advantage is a temporary discount.

How do ARM caps work?

Three numbers, usually written like 2/1/5: the maximum increase at the first adjustment, the maximum per adjustment after that, and the maximum lifetime increase over the start rate. Caps bound the worst case — computing the capped maximum payment before taking an ARM is the single most protective piece of homework.

What is APOR?

The Average Prime Offer Rate — a weekly official benchmark of prime mortgage pricing published through the FFIEC, per loan family. Regulators use it to test loans; borrowers can use it as a neutral yardstick for whether a quote is near prime-market pricing.