Approximately 180,000 adjustable-rate mortgages are scheduled for their first rate reset in 2027, according to the October Mortgage Monitor from Intercontinental Exchange (ICE). Among them, roughly 74,000 seven-year ARMs originated in 2020 are expected to see the largest median payment increase, about $1,066 a month, or 36%.
The figures come from the ICE press release that accompanied the report, which was published October 5. ICE headlined the release around demand: borrowers are choosing adjustable loans at the fastest pace in nearly four years, and the pool of active ARMs has grown to its largest size in 5.5 years.
Where the 2027 resets fall
The 180,000 first resets expected next year compare with roughly 150,000 in 2026, ICE’s report page says, so the count is up modestly. The same ICE data puts first resets in 2028 at about 155,000. In other words, the 2027 class is the largest of the three years, though not by an enormous margin.
The $1,066 figure is a median for that subset of about 74,000 loans, not an average across all 180,000 resets. Half of those 2020 seven-year borrowers are expected to see a larger jump and half a smaller one. ICE did not publish a single number for the other resets scheduled for 2027, and the 36% increase applies to the 2020 seven-year group only.
For borrowers in that group, the practical question is concrete: what will the payment be on the first reset date, and how does it compare with what the household pays now? The answer sits in the loan paperwork. The note lists the index, the margin, the cap on the first adjustment and the cap on later ones and the servicer can say when the first change takes effect.
The first resets arrive in 2027, and The Retirement Money Brief will cover ICE’s next mortgage-reset figures and what they mean for monthly budgets when they come out.
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A first reset is the moment a loan stops behaving like a fixed-rate mortgage. An ARM carries a fixed rate for an introductory stretch, commonly five, seven or ten years, and then the rate follows a market index plus a set margin, subject to caps written into the note. A borrower who took a seven-year ARM in 2020 reaches that point in 2027. The ARMs from that vintage were written when rates sat far below today’s levels, which is why the gap between the old payment and the new one is so wide.
Why adjustable loans are back in demand
ICE counts 3.1 million active first-lien ARMs, the most in 5.5 years. ARMs also made up more than 11% of rate locks, the highest share in nearly four years. Both numbers are in the same ICE release as the reset estimates.
Mortgage rates explain the shift. Freddie Mac’s weekly survey put the 30-year fixed rate at 7.28% on October 1, the highest reading since November 2023. When a fixed rate climbs that high, the lower introductory rate on an ARM looks attractive to buyers who expect to sell or refinance before the loan adjusts.
That bet is what makes today’s lock data relevant to the reset schedule. The loans that lock now will not reset for years, but they add to the pool that eventually does. The Calculated Risk newsletter, which summarized the October report on October 6, repeats the 180,000 and $1,066 figures from ICE.
Many ARMs have already reset
The reset wave is not new. ICE says 1.05 million active ARM loans have already reached their first reset. Those borrowers are living the experience the 2027 group is about to have: a payment based on the market rate in effect at the time of the reset, rather than the introductory rate they started with.
Not every borrower with an ARM faces a payment shock. A loan’s cap limits how far the rate can move at the first adjustment, and some households will have refinanced or sold before their date arrives. ICE’s median figure describes the typical borrower in the 2020 seven-year group, and individual results depend on the loan’s own terms and on where the index stands when the loan adjusts.
Reading the reset terms in an adjustable-rate note
Anyone holding an ARM that is approaching its first adjustment can start with the note and the most recent mortgage statement. The note names the index the rate follows, the margin added to it, the date of the first change and the caps on how much the rate can rise. The statement shows the current rate and payment, and the servicer’s customer-service line can confirm the first adjustment date.
With those numbers in hand, a borrower can estimate the new payment at several index levels and compare it with the household budget. The comparison shows whether the reset can be absorbed, whether a refinance is worth pricing, or whether selling before the date makes more sense. Each of those choices has costs, so it is worth asking the servicer or a HUD-approved housing counselor before deciding.
ICE’s October Mortgage Monitor is the source for the reset counts and the $1,066 median, and it will be the place to look for any update to the 2027 schedule as new data arrives.
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This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
