The comeback of adjustable-rate mortgages (ARMs) represents a significant development in the mortgage banking sector, particularly as lenders navigate persistent high interest rates and evolving borrower preferences. For mortgage lenders, this trend raises critical questions about portfolio composition, risk exposure, and competitive positioning. Drawing on Polygon Research's mortgage market intelligence tools, leveraging Home Mortgage Disclosure Act (HMDA) data for lending patterns, Census data for demographic trends, Residential Mortgage-Backed Securities (RMBS) data for securitization analysis, and Federal Housing Administration (FHA) data for government-backed loan performance, this post explores the strategic implications of the ARM resurgence in 2025. By building on our prior analyses, we offer lenders actionable guidance to capitalize on these shifts while mitigating potential downsides.
Polygon Research has consistently addressed ARM dynamics in the context of broader market trends.
In the data chart Who Leads in ARM Cash-Out Refinancing? A 2024 HMDA Lender Ranking (published October 9, 2025), we examined who led the entire cash-out refinance ARM originations trend in 2024. The most compelling takeaway was the dominance of credit unions. Institutions like State Employees', Navy Federal, and others occupy seven of the top ten spots. This success highlights a key strategic advantage of the credit unions - that they can flex and often leverage their member-centric model to excel in niche products.
Using HMDAVision in Polygon Vision, we see how ARMs have increased their share of originations from 4.9% in 2020 to approximately 11-12% in 2024, informed by HMDA data.
Using MBS Pivot in Polygon Pulse, we see that although the market is still relatively niche, there was a surge of Agency ARMs Year-over-Year increase of 71%, based on number of loans originated across the three agencies - Fannie Mae, Freddie Mach, and Ginnie Mae. The average interest rate on these loans is 5.30% down from 5.80% a year ago.
In one of our charts of the week, 2025 ARM Refinance Top Lenders by Agency Loan Count, we show a snapshot of the current market that underscores a concentrated market, where the top four lenders dominate origination volumes, reflecting efficiencies in scale and distribution. For mortgage lenders, it highlights a pivotal choice: pursue volume growth via competitive pricing and streamlined operations, or cultivate brand strength to command premium pricing. Secondary market and capital markets professionals should note the absence of a uniform clearing price, as execution varies by business model, informing tailored approaches to pricing, hedging, and profitability in the ARM refinance sector.
We regularly share our insights as resources, available at polygonresearch.com/blog and polygonresearch.com/data, to help housing finance experts build the foundational elements for understanding how ARMs can enhance lender strategies in 2025.
As of November 3 2025, ARM originations continue to rise amid Federal Reserve policy adjustments and moderating inflation. ARMs are a tool for lenders to attract affordability-seeking borrowers, especially in high-cost areas such as CA and CO.
The affordability is real, especially for younger borrowers. We explored that question in our chart Mortgage Payments Nearly Double for Young Homebuyers since 2018"(dated September 16, 2025).
RMBS originations data for purchase financing using ARMs shows significant increase year-over-year (54% increase, 2025 YTD through September, but this number is likely to be higher as we get the new RMBS data in a couple of days, as there is a slight securitization lag in the numbers of the last 1-2 months). For lenders, these trends imply a need for refined underwriting and scenario planning to balance growth with stability.
The ARM comeback presents lenders with opportunities to diversify offerings and capture market share, but it also demands vigilant risk management. Key implications include:
Portfolio Optimization: Use HMDA and Census integrations to identify high-ARM-penetration markets, enabling targeted product development and reduced concentration risks. For example, explore the ARM penetration by state interactively in the chart below.
Risk Mitigation: RMBS analytics allow for forecasting reset impacts under rate scenarios, helping lenders maintain delinquency rates below industry averages.
Compliance and Growth: FHA data supports adherence to fair lending standards while identifying expansion in government-backed segments, fostering sustainable origination volumes.
Adopting these data-driven approaches can position lenders to thrive in a dynamic environment, turning the ARM resurgence into a strategic advantage.
To find granular market data for ARM originations and build a solid mortgage originations strategy to position you to win in 2025 and beyond, we recommend using Polygon Vision where you can access both demographics, geographic and mortgage trends at the census tract and zip code level. There is nothing to install - just login and start thinking with the data.
To connect to current trends, use Polygon Pulse, to find rates and the use of ARMs by first time homebuyers, and understand the competitive dynamics in your state.
Explore the implications of adjustable-rate mortgages (ARMs) resurgence for lenders in 2025. Polygon Research's analysis offers forward-looking insights via HMDA, Census, RMBS, and FHA data, covering risks, opportunities, and strategies in evolving housing finance.
The comeback of adjustable-rate mortgages (ARMs) represents a significant development in the mortgage banking sector, particularly as lenders navigate persistent high interest rates and evolving borrower preferences. For mortgage lenders, this trend raises critical questions about portfolio composition, risk exposure, and competitive positioning. Drawing on Polygon Research's mortgage market intelligence tools, leveraging Home Mortgage Disclosure Act (HMDA) data for lending patterns, Census data for demographic trends, Residential Mortgage-Backed Securities (RMBS) data for securitization analysis, and Federal Housing Administration (FHA) data for government-backed loan performance, this post explores the strategic implications of the ARM resurgence in 2025. By building on our prior analyses, we offer lenders actionable guidance to capitalize on these shifts while mitigating potential downsides.
Polygon Research has consistently addressed ARM dynamics in the context of broader market trends.
In the data chart Who Leads in ARM Cash-Out Refinancing? A 2024 HMDA Lender Ranking (published October 9, 2025), we examined who led the entire cash-out refinance ARM originations trend in 2024. The most compelling takeaway was the dominance of credit unions. Institutions like State Employees', Navy Federal, and others occupy seven of the top ten spots. This success highlights a key strategic advantage of the credit unions - that they can flex and often leverage their member-centric model to excel in niche products.
Using HMDAVision in Polygon Vision, we see how ARMs have increased their share of originations from 4.9% in 2020 to approximately 11-12% in 2024, informed by HMDA data.
Using MBS Pivot in Polygon Pulse, we see that although the market is still relatively niche, there was a surge of Agency ARMs Year-over-Year increase of 71%, based on number of loans originated across the three agencies - Fannie Mae, Freddie Mach, and Ginnie Mae. The average interest rate on these loans is 5.30% down from 5.80% a year ago.
In one of our charts of the week, 2025 ARM Refinance Top Lenders by Agency Loan Count, we show a snapshot of the current market that underscores a concentrated market, where the top four lenders dominate origination volumes, reflecting efficiencies in scale and distribution. For mortgage lenders, it highlights a pivotal choice: pursue volume growth via competitive pricing and streamlined operations, or cultivate brand strength to command premium pricing. Secondary market and capital markets professionals should note the absence of a uniform clearing price, as execution varies by business model, informing tailored approaches to pricing, hedging, and profitability in the ARM refinance sector.
We regularly share our insights as resources, available at polygonresearch.com/blog and polygonresearch.com/data, to help housing finance experts build the foundational elements for understanding how ARMs can enhance lender strategies in 2025.
As of November 3 2025, ARM originations continue to rise amid Federal Reserve policy adjustments and moderating inflation. ARMs are a tool for lenders to attract affordability-seeking borrowers, especially in high-cost areas such as CA and CO.
The affordability is real, especially for younger borrowers. We explored that question in our chart Mortgage Payments Nearly Double for Young Homebuyers since 2018"(dated September 16, 2025).
RMBS originations data for purchase financing using ARMs shows significant increase year-over-year (54% increase, 2025 YTD through September, but this number is likely to be higher as we get the new RMBS data in a couple of days, as there is a slight securitization lag in the numbers of the last 1-2 months). For lenders, these trends imply a need for refined underwriting and scenario planning to balance growth with stability.
The ARM comeback presents lenders with opportunities to diversify offerings and capture market share, but it also demands vigilant risk management. Key implications include:
Portfolio Optimization: Use HMDA and Census integrations to identify high-ARM-penetration markets, enabling targeted product development and reduced concentration risks. For example, explore the ARM penetration by state interactively in the chart below.
Risk Mitigation: RMBS analytics allow for forecasting reset impacts under rate scenarios, helping lenders maintain delinquency rates below industry averages.
Compliance and Growth: FHA data supports adherence to fair lending standards while identifying expansion in government-backed segments, fostering sustainable origination volumes.
Adopting these data-driven approaches can position lenders to thrive in a dynamic environment, turning the ARM resurgence into a strategic advantage.
To find granular market data for ARM originations and build a solid mortgage originations strategy to position you to win in 2025 and beyond, we recommend using Polygon Vision where you can access both demographics, geographic and mortgage trends at the census tract and zip code level. There is nothing to install - just login and start thinking with the data.
To connect to current trends, use Polygon Pulse, to find rates and the use of ARMs by first time homebuyers, and understand the competitive dynamics in your state.