Quick answer
Key facts
Reading names like 5/6 and 7/6
The first number is how many years the starting rate lasts; the second is how often it adjusts afterwards. A 5/6 ARM is fixed for five years and then changes every six months. Fannie Mae’s standard ARMs use the 30-day average SOFR as the index, with caps of 2/1/5 on a 5/6 and 5/1/5 on 7/6 and 10/6 loans.
Example: the first reset
Say a $300,000 5/6 ARM starts at an example rate of 6.5%. The payment is $1,896 for five years, after which $280,833 is still owed. If rates have climbed, the first adjustment can add up to 2 percentage points, taking the rate to 8.5% and the payment to $2,261. The lifetime cap means the rate can never pass 11.5%.
Rates can fall too, but plan for the worst case. The fixed vs adjustable guide and ARM risks explained show when an ARM can make sense compared with a fixed-rate mortgage.
Sources
- Fannie Mae Standard ARM Plan Matrix — Rate caps on a Fannie Mae 5/6 ARM (first/periodic/lifetime); Rate caps on Fannie Mae 7/6 and 10/6 ARMs (first/periodic/lifetime) (Oct 1, 2021)
- Fannie Mae Selling Guide B2-1.4-02 — Index on Fannie Mae ARMs (Dec 10, 2025)
- CFPB: What is the difference between a fixed-rate and adjustable-rate mortgage (ARM) loan?
- CFPB: Consumer Handbook on Adjustable-Rate Mortgages (CHARM booklet)
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.