Today's mortgage and refinance rates: February 12, 2021 | Rates wobble

Mortgage and refinance rates have wavered since last Friday. Still, they are at all-time lows. 

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

Mat Ishbia, CEO of United Wholesale Mortgage, told Insider that you will likely get a better deal on a fixed-rate mortgage than on an adjustable-rate mortgage.

ARM rates are currently starting higher than fixed rates, and you have the chance of a future rate increase rate with an ARM. You may want to lock in a low rate while possible.

Today’s mortgage rates: Friday, February 12, 2021

Rates from Ad Practitioners LLC.

Since last Friday, rates for fixed mortgages have decreased, while adjustable-mortgage rates have ticked up slightly. All rates are still at all-time lows in general. 

We’re supplying you with the national average rates for conventional mortgages, which may be what you consider “standard mortgages.” Government-backed mortgages through the FHA, VA, or USDA can come with lower rates than those listed.

Generally, mortgage rates remain at striking lows. Low rates frequently signify a struggling economy. Mortgage rates will probably stay low as the US continues to bear the brunt of the economic impact of the COVID-19 pandemic.  

Today’s refinance rates: Friday, February 12, 2021

Rates from Ad Practitioners LLC.

Refinance rates on adjustable-rate mortgages have gone up slightly since last Friday, while rates on fixed-rate mortgages have decreased. The 30-year fixed mortgage rate has gone down the most significantly, dropping by nine basis points.

How do 15-year fixed mortgage rates work?

With a 15-year fixed mortgage, you’ll pay off your loan over 15 years, with a locked-in interest rate for the entire period. 

You’ll fork over higher monthly payments with a 15-year term than a 30-year term because you’ll pay off the same loan principal in half the time. 

However, it will cost less to take out a 15-year fixed mortgage than a 30-year fixed mortgage. It will take you half the time to pay off your mortgage, and you’ll get a lower interest rate. 

How do 30-year fixed mortgage rates work?

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

Your monthly payments will be smaller with a 30-year term than with a 15-year term because you’re dividing your payments over a more extended amount of time. 

However, you’ll pay a higher interest rate with a 30-year fixed mortgage than 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 period. 

How do ARMs work?

An adjustable-rate mortgage, commonly known as an ARM, will secure your rate for a set amount of time — then, your rate will frequently fluctuate. A 10/1 ARM locks in your rate for ten years, then your rate will increase or decrease annually.

A fixed-rate mortgage may remain the best deal for you, even as ARM rates are at all-time lows now. You can lock in a low rate for 15 or 30 years without risking a future ARM rate increase. 

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.

Best ways to get a low mortgage rate

Now may be an excellent day to secure a low mortgage rate, as both fixed-rate and adjustable-rate mortgages are at striking lows. 

On the flip side, you don’t need to hurry to apply for a mortgage or refinance. Rates will likely remain low well into 2021, if not longer, so you have time to better your financial situation and get an improved rate. Here are a few ways you can get the lowest possible rate:  

• Increase your credit score by making payments on time, paying down debts, or letting your credit age. You may benefit from requesting and reviewing a copy of your credit report for any errors that might be lowering your score. 
• Save more for a down payment. You might be able to put down as little as 3% if you want a conventional mortgage, but the minimum amount will depend on which type of mortgage you want. The larger your down payment, the more likely your lender is to offer an improved interest 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. Many lenders want to see a DTI ratio of 36% or less. To improve your ratio, pay down debts or look for ways to increase your income. 

You can lock in a low rate today if your finances are in order. That said, you don’t need to rush. 

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.

See the mortgage rates for Thursday, February 11 »

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