Today's mortgage and refinance rates: February 8, 2021 | Rates up

Many mortgage and refinance rates have ticked up since last Monday, though they remain at historic lows. 

You may want to lock in a low rate on a fixed-rate mortgage today. However, it might be best to avoid an adjustable-rate mortgage. 

Mat Ishbia, CEO of United Wholesale Mortgage, told Insider that adjustable-rate mortgages probably aren’t as good a deal as fixed-rate mortgages.

Your rate has the possibility of increasing in the future with an ARM, and ARM rates are currently starting higher than fixed rates. It may be in your best interest to secure a low rate while possible.

Mortgage rates for Monday, February 8, 2021

Mortgage typeAverage rate todayAverage rate last week
15-year fixed2.34%2.31%
30-year fixed3.13%3.05%
7/1 ARM4.05%3.80%
10/1 ARM3.84%3.66%

Rates from Ad Practitioners LLC.

Mortgage rates have increased since last Monday, but they remain at all-time lows in general. 

We’re showing you 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.

As a whole, mortgage rates are at notable lows. Low rates are often a signal of a faltering economy. Mortgage rates will remain low as the US grapples with the economic impact of the COVID-19 pandemic.

Refinance rates for Monday, February 8, 2021

Mortgage typeAverage rate todayAverage rate last week
15-year fixed2.59%2.58%
30-year fixed3.48%3.60%
7/1 ARM4.52%4.14%
10/1 ARM4.24%3.92%

Rates from Ad Practitioners LLC.

Since last Monday, refinance rates on adjustable-rate mortgages have gone up. The 15-year fixed mortgage rates have increased by just one basis point, and 30-year fixed mortgage rates have gone down. Overall, rates are still at striking lows. 

15-year fixed mortgage rates

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

You’ll shell out higher monthly payments with a 15-year term than a longer term because you’ll pay off the same mortgage principal in half the time. 

However, it will cost less to take out a 15-year fixed mortgage than a 30-year term. You’ll pay off the mortgage 15 years earlier, and you’ll get a lower interest rate to boot.   

30-year fixed mortgage rates

With a 30-year fixed mortgage, you’ll pay down your loan over 30 years at a constant interest rate.

A 30-year fixed mortgage comes with a higher interest rate than a 15-year term. You used to pay a higher rate for 30-year fixed rates than for adjustable rates, but now 30-year rates are the better deal.  

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

In the long run, you’ll pay more in interest with a 30-year term than a 15-year term because you’re paying a higher interest rate for more years.

Adjustable mortgage rates

An adjustable-rate mortgage, commonly referred to as an ARM, will lock in your rate for a set amount of time — then it will regularly alter the rate. A 10/1 ARM secures your rate for a decade. Then, your rate will fluctuate annually. 

A fixed-rate mortgage might still be the preferable option for you, even as ARM rates are at historic lows now. You can secure a low rate for the long term without gambling on an ARM rate increase down the line. 

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

How to get a low mortgage rate

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

However, there’s no need to rush to apply for a mortgage or to refinance. Rates will likely stay low for the coming months and possibly years, so you have time to improve your finances and obtain a better rate. To get the lowest possible rate, consider these steps before you apply:  

  • Increase your credit scoreEnsure you make all your payments on time — this is the most critical way to better your credit score. You may also think about paying down more debts or letting your credit age. 
  • Save more for a down paymentThe type of mortgage you want will determine the minimum amount you’ll need for your down payment. The higher your down payment, the more likely your lender is to offer a better 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, and an improved ratio may result in a lower rate. To better your ratio, pay down debts or look for opportunities to increase your income. 

If your finances look healthy, you could lock in a low rate now. If not, you still probably have months to rectify them and get a better 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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