Today’s mortgage and refinance rates: February 10, 2021

Most mortgage and refinance rates have climbed since last Wednesday. However, they are still at all-time lows overall. 

You may want to secure a low rate on a fixed-rate mortgage today —but it might be best to steer clear of an adjustable-rate mortgage. 

Mat Ishbia, CEO of United Wholesale Mortgage, told Insider you likely can’t get as good of a deal with an adjustable-rate mortgage as with a fixed-rate mortgage.

You open yourself up to the potential for a future rate increase with an ARM, and fixed rates are currently starting lower than ARM rates. You may want to lock in a low rate while you can.

Rates from Ad Practitioners LLC.

Since last Wednesday, the rates for 15-year fixed mortgages have decreased by a hair, while 30-year fixed rates have ticked up slightly. Adjustable-mortgage rates have increased more substantially. Rates remain at striking lows across the board. 

We’re showing you the national average rates for conventional mortgages, which may be what you consider “standard mortgages.” Government-backed mortgages through the FHAVA, or USDA may offer a lower rate for those eligible. 

In general, mortgage rates remain at historic lows. Low rates often signal a floundering economy. Mortgage rates will probably remain low as the US continues to wade through the economic impact of the COVID-19 pandemic.

Rates from Ad Practitioners LLC.

Refinance rates on adjustable-rate mortgages have gone up since last Wednesday. Refinance rates on 30-year fixed mortgages have increased by a marginal two basis points, while rates on 15-year fixed mortgages have decreased by the same amount.

With a 15-year fixed mortgage, you will pay off your loan over a decade and a half, and you’ll have a locked-in interest rate for the entire term. 

You’ll fork out more monthly with a 15-year term than with a 30-year fixed mortgage because you’ll pay off the same mortgage principal in half the time. 

However, a 15-year term is less expensive than a longer term. You’ll get a lower interest rate and it will take you half the time to pay off the mortgage. 

If you take out a 30-year fixed mortgage, it will take you 30 years to pay off your mortgage, and you’ll pay the same interest rate the whole time.

You’ll pay less per month with a 30-year term than with a 15-year term because you’re dividing up your payments over an extended period. 

On the flip side, you’ll pay a higher interest rate with a 30-year fixed mortgage than with a 15-year fixed mortgage. You’ll pay more in interest with a longer term because you’re paying a higher interest rate for a longer amount of time. 

An adjustable-rate mortgage, frequently referred to as an ARM, will lock in your rate for a set amount of time. Then, your rate will change regularly. A 10/1 ARM secures your rate for a decade, then the rate will increase or decrease annually. 

You may still get the better deal on a fixed-rate mortgage, even as ARM rates are now at all-time lows. You can get a low rate for the long term without risking an ARM rate increase down the line. 

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

You can get a low mortgage rate now, whether you’re looking to apply for a mortgage or refinance. Whether you’re looking to get a fixed-rate or an adjustable-rate mortgage, all rates are at striking lows.

Importantly, you don’t need to hurry to lock in a low rate if you’re not ready. Rates will likely stay low for the coming months, if not years, so you have the opportunity to better your financial situation before taking any action. If you’re looking to get the lowest possible rate, take a look at these tips:

  • Increase your credit score by making all your payments on time. You may also want to try paying down your debts or letting your credit age. It might be beneficial to request and review a copy of your credit report and look for any errors that could lower your score. 
  • Save more for a down paymentYou may be able to put down as little as 3% if you want a conventional mortgage, but the minimum requirement will be contingent on which type of mortgage you prefer. You have an improved possibility of getting a better interest rate from your lender 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. You can better your rate by lowering your ratio. To improve your ratio, pay down debts or look for opportunities to increase your income. 

If you’re financially prepared, you can lock in a low rate today. 

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.

Laura Grace Tarpley is the associate editor of banking and mortgages 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.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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