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Today’s Mortgage and Refinance Rate: May 31, 2021


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Since last Monday, the majority of mortgage and refinancing rates have fallen. They are also largely down from this point last month.

Rates remain low across the board, so it may be a good idea to request pre-approval and lock in a low rate.

You will probably want to apply for a fixed rate mortgage rather than an adjustable rate mortgage. Fixed rates are starting to be lower than adjustable rates right now, and you won’t be risking increasing your rate in a few years.

You don’t have to rush to take advantage of today’s low rates if you’re not ready to buy or refinance. Rates are expected to stay low until late summer or even fall.

Money.com conventional rates; RedVentures government guaranteed rates.

Find out more and receive offers from several lenders »

You can lock in a rate of less than 2.50% on a 15-year fixed mortgage, which is historically low.

The rates for conventional mortgages, which you can think of as “standard mortgages”, are already low. But you can often get an even lower rate with a government guaranteed mortgage through the FHA or the VA, depending on the length of the term you are looking for. Government mortgages are great options if you qualify.

Money.com conventional rates; RedVentures government guaranteed rates.

Compare the offers of refinancing lenders »

The 15 and 30 year fixed refinance rates are significantly better than the adjustable rates today, so you may want to consider a fixed rate mortgage if you want to refinance.

If your finances are in order, you could guarantee an ever lower mortgage rate today.

But rates will likely stay low for several months, so you don’t need to hurry if you’re not ready to buy or refinance yet. You may have time to boost your finances, which will allow you to improve your rate.

Here are some tips to improve your financial situation:

  • Increase your credit score by paying all your bills on time. Aggressively paying down debt or letting your credit age could also improve your score.
  • Put more for a down payment. The minimum down payment you will need to pay will depend on the type of mortgage you are looking for. Lenders will often give you better rates if you have more than the minimum.
  • Lower your debt ratio. Your DTI ratio is the amount you pay for debt each month divided by your gross monthly income. Many lenders want you to have a DTI ratio of 36% or less (although this depends on the type of mortgage). To improve your ratio, pay off debt, or think of ways to make more money.

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

Mortgage rate trends

The majority of mortgage rates have fallen since last week, with the exception of the FHA rate. Since that point last month, most rates have also fallen.

Evolution of refinancing rates

Since last Friday and last month, both fixed and adjustable refinancing rates have gone down. The rate of FHA has increased since last week, and the rate of VA has remained the same.

If you get a 15-year fixed mortgage, it will take you 15 years to pay off your mortgage, and your interest rate will stay the same all the time.

You’ll make higher monthly payments with a 15-year term than a 30-year term because you will be paying off the same loan principal in fewer years.

On the other hand, your total cost will be less with a 15-year fixed mortgage than a longer-term loan. You’ll pay off the mortgage in less time and get a lower interest rate to get started.

With a 30-year fixed mortgage, you’ll pay a fixed interest rate over three decades. A 30-year term carries a higher interest rate than a 15-year term.

Your monthly payments will be higher with a 30-year fixed mortgage than with a 15-year fixed mortgage because you are paying a higher interest rate for more years.

However, you will be making smaller monthly payments with a 30-year term than with a shorter term because you are spreading your payments over an extended period.

An adjustable rate mortgage, commonly known as an ARM, will lock in your rate for an agreed period. Then your rate will fluctuate periodically. An ARM 7/1 sets your rate for seven years, then your rate will change once a year.

Although ARM rates are at very low levels, you may still prefer a fixed rate mortgage. You can get a low rate for 15 or 30 years without changing a future rate increase with an ARM.

If you are considering getting an ARM, talk to your lender about your rates if you choose a fixed rate mortgage over an adjustable rate mortgage.

We also offer rates for FHA and VA mortgages. These are two types of government guaranteed mortgages. Another type is a USDA mortgage, a less common loan for buyers who live in rural areas.

Government guaranteed mortgages are guaranteed by government agencies. In the event of default, the agency reimburses your lender. Because these mortgages are more secure than standard mortgages, lenders have more lenient requirements when it comes to your credit score, debt-to-income ratio, or down payment. They are also often accompanied by lower interest rates.

Government guaranteed mortgages can be great choices if you qualify. Here are your options:

  • FHA Mortgage: This type of loan is not limited to a specific type of person. But it’s especially useful if your credit score isn’t good enough to qualify for a conventional mortgage.
  • VA Mortgage: You may qualify if you are an active military or veteran.
  • USDA Mortgage: You will be eligible if you live in a rural area and fall below a certain income limit.

Mortgage and refinancing 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
Caroline from the south
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

About the authors

Laura Grace Tarpley is a writer at Personal Finance Insider, which covers mortgages, refinancing and loans. She is also a certified personal finance educator (CEPF). In her five years of covering personal finance, she has written extensively on how to navigate loans.

Ryan Wangman is a reviewer at Personal Finance Insider, which reports on mortgages, refinancing, bank accounts, bank reviews, and loans. As part of his past personal finance writing experience, he has written on credit scores, financial literacy, and homeownership.



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