ARM Borrowers Face $1,000 Payment Jumps as 2020 Cohort Hits Reset
Thousands of homeowners with adjustable-rate mortgages (ARMs) are facing significant monthly payment increases as their initial fixed-rate periods expire. Approximately 150,000 borrowers will see their first rate adjustment in 2026, with another 186,000 facing resets in 2027. For those who locked in pandemic-era rates, median payments could jump by over $1,000 per month. While ARMs currently represent only 5.6% of active U.S. mortgages, their share of new applications has surged to over 11%, reflecting a shift toward lower initial rates despite higher long-term risks.