Banking

Today’s mortgage and refinance rates: May 24, 2021 | Rates rise

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The majority of mortgage rates are up since last Monday, and they’ve gone up since this time last month. Most refinance rates have gone up in the past month, but they are more varied since last Monday. 

Rates are moderately higher today than last week and last month, but you likely don’t need to worry about a substantial uptick in rates anytime in the near future. Mortgage rates are often low when an economy is struggling. The coronavirus pandemic has negatively impacted the US economy, and it’s taking a while for the country to bounce back.

Make the most of low rates by applying for preapproval with a lender. When you get a preapproval letter, your rate is usually secure for 60 to 90 days.

Conventional rates from Money.com; government-backed rates from RedVentures.

Learn more and get offers from multiple lenders »

Fixed mortgage rates are significantly lower than adjustable rates today.

Currently, rates for conventional mortgages, which you may consider “standard mortgages,” are already low. But you can often get an even better rate with a government-backed mortgage through the FHA or VA, depending on which term length you pick. Government mortgages are great options if you qualify.

Conventional rates from Money.com; government-backed rates from RedVentures.

Compare offers from refinancing lenders »

Today, the best refinance rate is the 15-year fixed mortgage rate.

Most mortgage rates are up since last Monday, but they’re still low in general. It could be an ideal time to lock in a good rate.

However, rates likely won’t substantially increase anytime soon, so you don’t need to hurry to take advantage of low rates. Rates will probably stay low for several months, if not longer. You might have the opportunity to improve your finances to receive a better rate. 

To get the top possible rate, think about these tips before applying:  

  • Improve your credit score by making timely payments, paying down debt, or letting your credit age. The higher your score, the better interest rate a lender will likely offer you. 
  • Save more for a down paymentThe smallest down payment required of you depends on which type of mortgage you want. But a higher down payment often results in a better rate.
  • Reduce your debt-to-income ratio. Your DTI ratio is the amount you pay toward debts each month, divided by your gross monthly income. Most lenders like to see a ratio of 36% or less. To lower your ratio, pay down debts or look for ways to boost your income. 

You can secure a low rate now if your finances are healthy, but you don’t need to rush to get a mortgage or refinance if you’re not prepared. 

Mortgage rate trends

Since last Monday and this time last month, mortgage rates have gone up. The exception is FHA rates. 

Refinance rate trends

Refinance rates are varied since last Monday. Rates are up from this point last month, except 30-year FHA rates, which are down by 13 basis points.

With a 15-year fixed mortgage, it will take you 15 years to pay off your mortgage, and your interest rate will stay the same the whole loan period.

You’ll pay more per month with a 15-year term than a longer term because you’re paying off the same mortgage principal in fewer years. 

On the other hand, a 15-year term will be less expensive than a 30-year term. You’ll receive a better interest rate and you’ll pay off your mortgage in a shorter period. 

If you take out a 30-year fixed mortgage, you’ll pay off your loan over three decades, and you’ll secure your interest rate for the entire term. 

You’ll pay less per month with a 30-year fixed mortgage than with a shorter term because you’re dividing up your payments over more years.  

But you’ll pay more in interest with a 30-year term than with a 15-year term, as you’re paying a higher interest rate for an extended period. 

An adjustable-rate mortgage, or ARM, keeps your rate the same for a set amount of time. Then your rate will vary regularly. A 7/1 ARM keeps your rate constant for seven years, then your rate will fluctuate annually.

ARM rates are currently at historic lows, but you may still prefer a fixed rate.

Fixed rates are starting lower than ARM rates, so it may be a good opportunity to secure a low rate with a fixed mortgage. You also won’t risk your rate going up down the line, as you would with an ARM.

If you’re thinking about getting an ARM, discuss with your lender what your rates would be if you chose a fixed-rate mortgage versus an ARM.

We’ve also given you rates for FHA and VA mortgages. These are two types of government-backed mortgages. Another type is a USDA mortgage, a more uncommon loan for buyers who live in rural areas.

Government-backed mortgages are backed by government agencies. If you default on your payments, the agency compensates the lender. Because these mortgages are less risky than conventional mortgages, lenders are more lenient about your credit score, debt-to-income ratio, or down payment. They also often have lower interest rates.

Government-backed mortgages can be solid options if you are eligible. Here are your choices:

  • FHA mortgage: This type of loan isn’t aimed at a certain type of person. But it’s especially useful if your credit score isn’t high enough to qualify for a conventional mortgage.
  • VA mortgage: You might qualify if you’re an active military member or veteran.
  • USDA mortgage: You’ll be eligible if you live in a rural area and fall under a certain income limit.

Mortgage and refinance rates by state

Check the latest rates in your state at the links below. 

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

About the authors

Laura Grace Tarpley is an editor at Personal Finance Insider, covering mortgages, refinancing, and lending. She is also a Certified Educator in Personal Finance (CEPF). Over her five years of covering personal finance, she has written extensively about ways to navigate loans.

Ryan Wangman is a reviews fellow at Personal Finance Insider reporting on mortgages, refinancing, bank accounts, bank reviews, and loans. In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership.

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