Today's mortgage and refinance rates: February 6, 2021 | Rates go up

Since last Saturday, many mortgage and refinance rates are up — though they remain at striking lows overall. 

You may have a good opportunity lock in a low rate on a fixed-rate mortgage today, but you might want to avoid an adjustable-rate mortgage. 

Mat Ishbia, CEO of United Wholesale Mortgage, told Insider that fixed-rate mortgages are probably a better deal than adjustable-rate mortgages now. 

Fixed rates used to start higher than ARM rates, and there was a chance for your ARM rate to decrease in the future. Currently, Ishbia said fixed rates are lower than adjustable rates, and you can secure that low rate for 15 or 30 years. 

Mortgage rates on Saturday, February 6, 2021

Mortgage typeAverage rate todayAverage rate last week
15-year fixed2.34%2.34%
30-year fixed3.13%3.11%
7/1 ARM4.05%3.84%
10/1 ARM3.84%3.78%

Rates from Ad Practitioners LLC.

Most mortgage rates have increased since last Saturday, though 15-year fixed rates have held steady. Rates are still at historic lows in general. 

We’re supplying you with the national average rates for conventional mortgages, which may be what you consider “standard mortgages.” You might be able to get a lower rate with a government-backed mortgage through the FHA, VA, or USDA.

Overall, mortgage rates remain at all-time lows. Low rates often signify a struggling economy. As the US bears the brunt of the economic fallout of the COVID-19 pandemic, rates will likely continue to stay low.

Mortgage refinance rates on Saturday, February 6, 2021

Mortgage typeAverage rate todayAverage rate last week
15-year fixed2.59%2.59%
30-year fixed3.48%3.59%
7/1 ARM4.52%4.19%
10/1 ARM4.24%4.18%

Rates from Ad Practitioners LLC.

Refinance rates on adjustable-rate mortgages have gone up since last Saturday. Rates on 30-year terms have decreased, and 15-year rates are unchanged. All rates remain at historic lows. 

How do 15-year fixed mortgage rates work?

With a 15-year fixed mortgage, you’ll pay off your loan in a decade and a half, paying the same interest rate over the entire period.

It will cost you less to take out a 15-year fixed mortgage than a 30-year fixed mortgage. You’ll pay off the loan in half the time and will get a lower interest rate to boot. 

On the flip side, your monthly payments will be higher with a 15-year fixed mortgage than with a longer term because you’ll pay off the same mortgage principal in half of the time. 

How do 30-year fixed mortgage rates work?

With a 30-year fixed mortgage, you’ll pay down your mortgage over three decades, and your interest rate will remain the same the whole time. 

Your interest rate will be higher with a 30-year term than with a 15-year fixed mortgage. You used to pay a higher interest rate with a 30-year fixed mortgage than with an adjustable mortgage, but now you can get a lower rate with a 30-year fixed mortgage.

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 longer. 

However, you’ll pay less per month with a 30-year term than with a 15-year fixed mortgage because you’re spreading out your payments over a longer amount of time. 

How do ARMs work?

While a fixed-rate mortgage keeps your rate constant for the entirety of your loan, with an adjustable-rate mortgage, you’ll pay a steady rate for the first several years, then that rate will change regularly. A 10/1 ARM locks in your rate for a decade, then your rate will fluctuate once per year. 

Though ARM rates are now at historic lows, you may still get the best deal on a fixed-rate mortgage. You can secure a low rate for 15 or 30 years and not have to worry about an ARM rate increase down the line. 

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

Ways to get a low mortgage rate

You may be able to secure a low mortgage rate now, whether you’re looking to apply for a mortgage or refinance. You can get a historically low rate on both fixed-rate and adjustable-rate mortgages.

However, there’s no need to hurry. Rates will probably remain low for the remainder of 2021 and beyond, so you have time to improve your financial profile. 

If you’re looking to get the lowest possible rate, take a look at these tips:

  • Increase your credit score by making timely payments, paying off your debts, or allowing your credit to age. You might want to request and review a copy of your credit report and check for any errors that could be lowering your score. 
  • Save more for a down payment. You may be able to put down as little as 3% if you’re looking for a conventional mortgage, but the minimum requirement will depend on which type of mortgage you want. You have a better chance of getting an improved 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. 

Provided your finances are in order, today might be an excellent time to lock in a low rate.

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.

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