Banking

Today’s mortgage and refinance rates: May 28, 2021 | Rates decrease

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Most mortgage and refinance rates are down since last Friday and since this time last month. If your finances are in a good place, it could be a good day to get a low rate.

To lock in your rate, apply for preapproval with a lender. Once you’re preapproved, your rate should stay locked in for 60 to 90 days, depending on the lender.

You don’t need to rush to take advantage of today’s low rates if you aren’t ready to buy or refinance, though. Marvin Loh, Senior Global Macro Strategist at State Street, told Insider that rates should stay low until late summer or even fall.

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

Learn more and get offers from multiple lenders »

Other than 7/1 ARM rates, today’s mortgage rates are all well below 4%.

Rates for conventional mortgages, which you might think of as “regular mortgages,” are already low. But you can often get an even lower rate with a government-backed mortgage through the FHA or VA, depending on which term length you want. Government mortgages are solid options if you’re eligible.

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

Compare offers from refinancing lenders »

If you’re comfortable making higher monthly payments, you may want to consider refinancing into a 15-year mortgage rather than a 30-year mortgage. Today’s 15-year rate is over 1% lower than the 30-year rate.

Mortgage rates are at historic lows, so it could be a good day to lock in a rate.

But rates should stay low for a few more months, so you don’t need to rush if you aren’t ready to buy or refinance yet. You may have time to improve your finances, which will land you a better rate.

Here are some ways to boost your financial situation:

  • Improve your credit score by paying all your bills on time. Aggressively paying down debts could also help you score.
  • Save more for a down payment. The smallest down payment you need depends on which type of mortgage you want. Lenders often offer better rates if you have more than the minimum.
  • Lower your debt-to-income ratio. Your DTI ratio is the amount you pay toward debts each month, divided by your gross monthly income. Many lenders want you to have a DTI ratio of 36% or less (although it depends on the type of mortgage). To improve your ratio, pay down debts or consider ways to earn more money.

You can get a low mortgage rate if your finances are strong, and you probably have time to make improvements and get a better rate.

Mortgage rate trends

Other than the FHA rate, mortgage rates have gone down since last Friday. Most rates have also decreased since this time last month.

Refinance rate trends

Fixed and adjustable refinance rates are down since last Friday. The FHA rate has increased, and the VA rate has held steady. Most refinance rates have gone down since April 28.

With a 15-year fixed mortgage, you’ll pay down your mortgage over 15 years, and you’ll pay a set interest rate the whole time. 

You’ll pay more per month with a 15-year term than a 30-year term because you’ll pay off the same mortgage principal over less time. 

On the bright side, it will cost less to take out a 15-year fixed mortgage than a 30-year fixed mortgage. You’ll pay down the mortgage in half the time and get a lower interest rate.

With a 30-year fixed mortgage, you’ll pay off your mortgage over 30 years, and you’ll pay the same interest rate for the life of the loan. A 30-year term has a higher interest rate than a shorter term.

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

But you’ll pay less per month with a 30-year term than with a 15-year fixed term, because you’re dividing your payments over more years. 

An adjustable-rate mortgage, often known as an ARM, will secure your rate for a predefined period. Then your rate will change regularly. A 10/1 ARM keeps your rate constant for 10 years, then your rate will fluctuate annually. 

Though ARM rates are at historic lows, you may still want to get a fixed-rate mortgage. You can lock in a low rate for 15 or 30 years without risking a rate increase down the line with an ARM.

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

We’re also displaying rates for FHA and VA mortgages. These are two kinds of government-backed mortgages. Another type is a USDA mortgage, a less common loan for buyers who live in rural areas.

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

Government-backed mortgages can be great deals if you qualify. Here are your options:

  • FHA mortgage: This type of loan isn’t limited to a certain type of person. But it’s particularly useful if your credit score isn’t good enough to qualify for a conventional mortgage.
  • VA mortgage: You may 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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