Mortgage and refinance rates have dropped across the board since last Wednesday.
You should probably lock in a fixed mortgage rate instead of risking your rate going up in the future with an adjustable-rate mortgage.
Mortgage rates are often low when the economy is in distress. The coronavirus pandemic has damaged the US economy, and it's taking time for the country to bounce back.
Christian Wallace, Head of Real Estate Services at Better.com, told Insider that rates will likely remain low as the US anticipates a fourth wave of coronavirus. A fourth wave could impact the economy by causing more people to stay home.
Today could be a great opportunity to lock in a low mortgage rate. But don't worry if you aren't ready to buy or refinance yet, because rates will likely stay low for a while.
Today's mortgage rates: Wednesday, April 21, 2021| Mortgage type | Average rate today |
| 15-year fixed | 2.54% |
| 30-year fixed | 3.39% |
| 7/1 ARM | 4.36% |
| 10/1 ARM | 4.01% |
Rates from Money.com
Learn more and get offers from multiple lenders.»You can probably lock in a 15-year fixed mortgage rate well below 3% today. Mortgage rates are at historic lows in general.
Keep in mind, these are the national average rates for conventional mortgages, which might be what you think of "normal mortgages." You may be able to get a lower rate on a government-backed mortgage through the FHA, VA, or USDA.
Today's refinance rates: Wednesday, April 21, 2021| Mortgage type | Average rate today |
| 15-year fixed | 2.74% |
| 30-year fixed | 3.74% |
| 7/1 ARM | 4.48% |
| 10/1 ARM | 4.60% |
Rates from Money.com
Click here to compare offers from refinancing lenders »Even though refinance rates are higher than purchase mortgage rates, you can still refinance into a 15-year term with a rate under 3%.
Tips for locking in a low mortgage rateMortgage rates are at all-time lows, so you may consider locking in a low rate.
But rates probably won't spike anytime soon, so you don't have to rush. You have the opportunity to change your financial situation and receive a lower rate.
To get the best possible rate, consider these steps before applying:
- Improve your credit score by making payments on time, paying down debt, or letting your credit age. You'll get a more agreeable interest rate with a higher score, and many lenders will lower your rate with a score of at least 700.
- Save more for a down payment. The minimum down payment you'll need depends on which type of mortgage you are after. You'll probably get a better rate with a higher down payment.
- 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 to see a ratio of 36% or less. To improve your ratio, pay down debts or look for ways to increase your income.
- Choose a government-backed mortgage. You may consider a USDA loan (aimed at low-to-moderate-income borrowers buying in a rural area), a VA loan (designed for military members and veterans), or an FHA loan (not designated for any particular group). These mortgages often come with lower interest rates than conventional mortgages. As a bonus, down payments aren't required for USDA or VA loans.
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. But homes are selling fast. So if you know you'll be ready to buy in the next couple months, you may want to lock in a rate soon so you can act quickly when it's time to buy.
Mortgage and refinance rates trendsMortgage rate trends| Mortgage type | Average rate today | Average rate last week | Average rate last month |
| 15-year fixed | 2.54% | 2.59% | 2.69% |
| 30-year fixed | 3.39% | 3.48% | 3.63% |
| 7/1 ARM | 4.36% | 4.44% | 5.06% |
| 10/1 ARM | 4.01% | 4.72% | 4.90% |
Mortgage rates are down since last Wednesday and since this time last month. The 10/1 ARM rates have dropped the most drastically.
Refinance rate trends| Mortgage type | Average rate today | Average rate last week | Average rate last month |
| 15-year fixed | 2.74% | 2.80% | 3.03% |
| 30-year fixed | 3.74% | 3.78% | 3.89% |
| 7/1 ARM | 4.48% | 4.74% | 5.27% |
| 10/1 ARM | 4.60% | 5.14% | 5.19% |
Refinance rates have decreased across the board since last week and last month. Although adjustable rates have gone down more significantly than fixed rates, the fixed refinance rates are still lower overall.
How 15-year fixed rates workIf you get a 15-year fixed mortgage, it will take you a decade and a half to pay down your mortgage, and your interest rate will stay constant the whole time.
You'll pay more per month with a 15-year term than a 30-year term because you're repaying the same mortgage principal in half the time.
However, a 15-year fixed mortgage will cost less overall than a 30-year fixed mortgage. It will take you fewer years to pay off your mortgage and you'll get a lower interest rate to boot.
How 30-year fixed rates workWith 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.
On the flip side, 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.
How adjustable rates workAn adjustable-rate mortgage, commonly referred to as an ARM, will set your rate for a predefined period. Then your rate will fluctuate periodically. A 10/1 ARM keeps your rate constant for a decade, then your rate will vary annually.
You may want a fixed-rate mortgage over an ARM, even though ARM rates are now at historic lows. The 30-year fixed rates are equivalent to or lower than ARM rates, so it could be the right time to lock in a low rate with a fixed mortgage. Additionally, you won't chance an ARM rate increase down the line.
If you're considering getting an ARM, discuss with your lender what your rates would be if you chose a fixed-rate versus an adjustable-rate mortgage.
Mortgage and refinance rates by stateCheck 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
Laura Grace Tarpley is an editor at Personal Finance Insider, covering mortgages, refinancing, bank accounts, and bank reviews. She is also a Certified Educator in Personal Finance (CEPF). Over her four years of covering personal finance, she has written extensively about ways to save, invest, and navigate loans.
Ryan Wangman is a reviews fellow at Personal Finance Insider reporting on mortgages, refinancing, bank accounts, and bank reviews. In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership.
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