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Some mortgage and refinance rates are up since last Sunday, but the increases aren’t drastic. Some rates are down since last month, and rates remain low in general.
Mortgage rates will probably stay low for at least a few more months, so you don’t need to rush to take advantage of today’s low rates if you aren’t prepared. But if you are ready to buy or refinance, shop around for lenders to compare their rates.
Ask each lender for a loan estimate. This is an itemized list of fees that helps you compare what you’ll pay from lender to lender. Ideally, you’d choose a lender that charges both a relatively low rate and low fees.
Conventional rates from Money.com; government-backed rates from RedVentures.
Learn more and get offers from multiple lenders »
Rates for conventional mortgages, which you may think of as “regular mortgages,” are currently low. But you can usually get an even better rate with a government-backed mortgage through the FHA or VA, depending on which term length you want. Government mortgages are good options if you’re eligible.
Conventional rates from Money.com; government-backed rates from RedVentures.
Compare offers from refinancing lenders »
Adjustable refinance rates are significantly higher than fixed or government-backed refinance rates.
Mortgage rates are at all-time lows, so it could be a good day to lock in a rate — especially if you know you want to buy soon.
But rates will probably stay low for a while, so you don’t necessarily need to rush to take advantage of low rates if you aren’t quite ready yet. You have time to boost your financial profile, which could help you get an even better rate.
To get the best possible rate, consider these steps before applying:
- Increase your credit score by making payments on time, paying down debt, or letting your credit age. The higher your score, the better.
- Save more for a down payment. The minimum down payment you’ll need depends on which type of mortgage you are after. But if you can make more than the minimum down payment, you’ll probably be rewarded with a higher rate.
- Lower 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 want your ratio to be 36% or lower. To improve your ratio, pay down debts or look for ways to increase your income.
You can secure a low rate now if your finances are in good shape, but you don’t need to rush to get a mortgage or refinance if you’re not prepared.
Mortgage and refinance rates trends
Mortgage rate trends
Average rates for fixed and adjustable mortgages are down across the board since last week and since last month, with average rates for 7/1 ARM loans dropping back down below 4%. Government-backed mortgages haven’t dropped as universally — they’re holding just about steady since last month, with only slight fluctuations.
Refinance rate trends
Since last week, average rates for fixed and adjustable refinance loans have followed a the same pattern as mortgage loans: All of them have dropped in the past seven days. They’ve also dropped since last month, although rates for a 7/1 ARM refinance loan still exceed 4% by a healthy margin. Average rates for government-backed loans have risen since last week and since last month.
A 15-year fixed mortgage locks in your rate for the entire 15 years you’ll spend paying down your mortgage.
A 15-year term comes with higher monthly payments than a longer term, because you’re paying off the same loan principal in fewer years.
But a 15-year term will cost you less than a 30-year term in the long run. You’ll get a lower interest rate and pay off your mortgage in a half the time.
If you get a 30-year fixed mortgage, you’ll pay a set rate for 30 years. A 30-year fixed mortgage has a higher interest rate than a 15-year fixed mortgage.
You’ll make smaller monthly payments with a 30-year term than with a 15-year term because you’re dividing your payments over an extended period.
On the other hand, you’ll pay more in interest with a 30-year fixed mortgage than with a shorter term, as you’re paying a higher interest rate for more years.
An adjustable-rate mortgage, often known as an ARM, will lock in your rate for a set period. Then your rate will change regularly. A 7/1 ARM keeps your rate constant for seven years, then your rate will increase or decrease once per year.
You may consider choosing a fixed-rate mortgage over an ARM, even though ARM rates are currently at all-time lows. The 30-year fixed rates are lower than ARM rates, so you might want to secure a low rate with a fixed mortgage. Additionally, you won’t risk a future ARM rate increase.
If you’re thinking about getting an ARM, discuss with your lender what your rates would be if you chose a fixed-rate versus an adjustable-rate mortgage.
We’re also providing rates for FHA and VA home loans, two kinds of government-backed mortgages.
Government mortgages are backed by government agencies. The government pays the lender if you fail to make mortgage payments.
Government-backed home loans are less risky than conventional mortgages, so lenders have more lenient requirements for your credit score, debt-to-income ratio, or down payment. Government mortgages also come with lower interest rates. These mortgages can be great deals if you qualify. Here are your options:
- FHA mortgage: FHA loans are mostly for people with lower credit scores. But these mortgages aren’t limited to a certain type of person, like VA and USDA loans.
- VA mortgage: You may be eligible if you’re an active military member or veteran.
- USDA mortgage: You could qualify 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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