Agency ARM Borrower Credit Profile

YTD 2026 Agency ARM borrowers have a lower credit score and more highly leveraged credit profile than the 2021 cohort, based on the four measures shown in MBS Pivot.

Average FICO declined from 766 to 737, while average LTV increased from 64% to 79% and average DTI rose from 32.2% to 40.4%. The largest relative change occurred in the chart-defined Zero-Equity Bucket: the share of loans with 97–100% LTV increased from 0.4% to 15.7%, approximately 39 times the 2021 level.

Together, the metrics show a current cohort entering with less borrower equity, greater debt burden relative to income and lower average credit scores.

For broader context on product strategy, pricing and borrower demand, see What Does the ARM Comeback Mean for Mortgage Lenders in 2025?

Lenders can use the comparison to review eligibility, pricing, mortgage-insurance exposure and layered-risk concentrations by credit band. Capital-markets and servicing teams can segment the cohort when evaluating execution, retention and performance assumptions. These descriptive averages do not establish causation or predict future loan performance. Because the chart compares full-year 2021 with YTD 2026, the results are best viewed as a directional measure of how the Agency ARM borrower mix has shifted over time.