5/1 adjustable-rate mortgage: credit union vs bank
5/1 ARM · Loan · rates as of December 26, 2025
The national average 5/1 adjustable-rate mortgage rate is 5.73% at federally insured credit unions versus 6.55% at banks (-0.82 pts). That makes the credit union the better deal on this product - a 0.82-point saving for borrowers. Credit unions offer a markedly lower average 5/1 ARM rate than banks. These are national averages, general information, not financial advice or an offer.
Source: NCUA Credit Union and Bank Rates. Data as of December 26, 2025.
What is 5/1 adjustable-rate mortgage?
An adjustable-rate mortgage with a fixed rate for the first 5 years, then annual adjustments. The quoted rate is the national average start rate.
Credit union vs bank average
| Measure | Value |
|---|---|
| Credit union average | 5.73% |
| Bank average | 6.55% |
| Spread (CU minus bank) | -0.82 pts |
| Better deal | Credit union |
Source: NCUA Credit Union and Bank Rates. Data as of December 26, 2025.
Worked example: On a $200,000 balance
On a $200,000 balance, one year of interest is about $11,460 at the credit-union average (5.73%) versus about $13,100 at the bank average (6.55%) - roughly $1,640 less in interest at the credit union in year one. Over a 30-year term the total saving is larger.
Simple illustration on the opening balance, before compounding, fees and taxes. Use the calculator with your own numbers.
How this compares
| Where | Average rate | Better deal |
|---|---|---|
| Credit unions | 5.73% | Yes |
| Banks | 6.55% | No |
Frequently asked questions
Are 5/1 adjustable-rate mortgage rates better at a credit union or a bank?
Credit unions charge a lower national average rate on this product: 5.73% at credit unions vs 6.55% at banks (a 0.82-point saving for borrowers). Credit unions offer a markedly lower average 5/1 ARM rate than banks. This is a national average, not the rate any single institution offers.
What is 5/1 adjustable-rate mortgage?
An adjustable-rate mortgage with a fixed rate for the first 5 years, then annual adjustments. The quoted rate is the national average start rate.
When was this 5/1 adjustable-rate mortgage rate measured?
These are national averages from the NCUA Credit Union and Bank Rates, 2025 Q4, with rates as of December 26, 2025. The NCUA updates the report quarterly and the underlying survey is collected by S&P Global Market Intelligence. Confirm the live rate with the credit union or bank before deciding.
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Sources & accuracy
NCUA Credit Union and Bank Rates, 2025 Q4 (rates as of December 26, 2025; underlying survey by S&P Global Market Intelligence). National average, general information, not financial advice. The rate you are offered depends on the institution, your credit and the balance. Verify the live rate before deciding. See methodology and disclaimer.
Last updated: 2026-06-22