Today's mortgage and refinance rates: May 20, 2021 | Rates shift

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Mortgage and refinance rates have mostly decreased since last Thursday. Rates are still low in general, though, and many rates are lower today than they were this time last month.

You probably don’t need to worry about a drastic rate increase anytime soon. Inflation and employment in the US need to improve for an extended period of time for mortgage rates to go up. So rates should stay low for at least a few more months.

To take advantage of low rates by applying for preapproval with a lender. When you receive a preapproval letter, your rate is usually locked in for 60 to 90 days.

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Mortgage rates for Thursday, May 20, 2021

Conventional rates from Money.com; government-backed rates from RedVentures.

Learn more and get offers from multiple lenders »

You may be able to lock in a mortgage rate under 3% for a 15-year fixed mortgage, or for an FHA or VA loan.

Rates for conventional mortgages, which you may consider “regular mortgages,” are already low right now. But you can usually get an even better rate with a government-backed mortgage through the FHA and VA, depending on which term length you choose. Government mortgages are good options if you’re eligible.

Refinance rates for Thursday, May 20, 2021

Conventional rates from Money.com; government-backed rates from RedVentures.

Compare offers from refinancing lenders »

The 10/1 ARM rate is the highest refinance rate today, and the 15-year fixed rate is the lowest.

Tips for getting the best mortgage rate

Today could be a good time to lock in a low mortgage rate. But if you aren’t ready to buy or refinance yet, you probably don’t have to worry about missing out on great rates. Mortgage rates should stay low for at least a few months.

In fact, you may have time to improve your finances to land an even better rate. Consider the following steps:

• Improve your credit score by making payments on time or paying down debt. You can request a copy of your credit report to hunt for any mistakes that could be tanking your score.
• Save more for a down payment. The smallest down payment you’ll require will be contingent on which type of mortgage you want. But if you can put down more than the minimum you need, you’ll likely get a better rate.
• Decrease 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 prefer a DTI ratio of 36% or less. To improve your ratio, pay down debts or look for ways to increase your income.

You can secure a low rate now if your finances are in order, but there’s no need to rush to get a mortgage or refinance if you’re not ready. 

Mortgage and refinance rates trends

Mortgage rate trends

With the exeception of a small increase in rates for a 30-year fixed loan, mortgage rates have stayed steady or decreased since last Thursday. All rates have decreased since this time last month.

Refinance rate trends

Most refinance rates are down since last Thursday, but 15-year fixed rates have held steady. All rates are down since last month except rates for a 30-year fixed loan, which rose by only two basis points..

How 15-year fixed rates work

If 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 work

If you get a 30-year fixed mortgage, you’ll pay down your mortgage over three decades, and you’ll have a set interest rate the whole time. 

You’ll pay less per month with a 30-year term than a shorter term because you’re splitting up your payments over more time.

But you’ll pay more total interest with a 30-year fixed mortgage than a 15-year fixed mortgage because you’ll have a higher interest rate for an extended period. 

How adjustable rates work

A fixed-rate mortgage sets your rate for the entire time you’re paying off your mortgage. But with an adjustable-rate mortgage, you’ll pay a constant rate for a predetermined amount of time. After that, your rate will vary periodically. A 10/1 ARM sets your rate for a decade, then your rate will fluctuate yearly.

Although ARM rates are at all-time lows now, you may still want to get a fixed-rate mortgage. The 30-year fixed rates are lower than ARM rates, so it could be an excellent opportunity to secure a low rate with a fixed mortgage. This way, you won’t need to worry about your rate increasing in the future with an ARM.

Some lenders are still offering competitive ARM rates, though, so ask your lender about details if you’re interested in an adjustable rate.

How government mortgages work

We’re also providing rates for FHA and VA loans, two kinds of government-backed mortgages. 

Government mortgages are backed by federal agencies. The agency pays the lender back should you default on your mortgage payments.

These mortgages are less risky for lenders than conventional mortgages, so lenders usually have more lenient requirements for your credit score, debt-to-income ratio, or down payment. Government mortgages also charge lower interest rates.

Government-backed mortgages are great options if you qualify. Here are the different types:

• FHA mortgage: This mortgage isn’t limited to a certain type of person. But it’s particularly useful if your credit score isn’t good enough to qualify for a conventional mortgage.
• VA mortgage: VA loans are for active military members, veterans, and their family members.
• USDA mortgage: You may qualify if you live in a rural area and fall under a certain income limit.

Mortgage and refinance 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
South Carolina
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

About the authors

Laura Grace Tarpley is an editor at Personal Finance Insider, covering mortgages, refinancing, and lending. She is also a Certified Educator in Personal Finance (CEPF). Over her five years of covering personal finance, she has written extensively about ways to navigate loans.

Ryan Wangman is a reviews fellow at Personal Finance Insider reporting on mortgages, refinancing, bank accounts, bank reviews, and loans. In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership.

Best Mortgage Rates Today: Thursday May 20, 2021

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