Personal finance

Today’s mortgage and refinance rates: March 21, 2021 | Rates shoot up

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Since last Sunday, mortgage and refinance rates have increased, with mortgage rates for 10/1 ARMs going up by a staggering 90 basis points. That said, rates remain at all-time lows.

You may want to go after a fixed-rate mortgage instead of an adjustable-rate mortgage if you’re looking to get a mortgage or a refinance. Of late, fixed-rate mortgages are a better deal than adjustable-rate mortgages because ARM rates start higher, and your rate may go up down the line.

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Since last Sunday, mortgage rates have rocketed up, with both 7/1 and 10/1 ARM rates increasing by at least 70 basis points. You can still lock in a fixed mortgage rate for under 4%.

We’re displaying the average rates nationwide for conventional mortgages, which may be what you consider “standard mortgages.” Government-backed mortgages through the FHA, VA, or USDA may grant you an improved rate — provided you’re eligible.

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Refinance rates for all mortgages have increased since last week. Rates have also ticked up from this point last month.

Refinance rates remain exceptionally low overall. Low rates commonly indicate an economy in distress. As the US continues to deal with the economic fallout of the COVID-19 pandemic, rates will likely stay low.

Since last Sunday, fixed and adjustable mortgage rates have gone up across the board. Still, they’re at historic lows, and you may consider locking in a low mortgage rate today.

You don’t necessarily need to rush, though. Rates will likely stay reasonably low for months, if not years. You probably have time to better your financial situation and lock in a better rate. Consider the following steps:

  • Boost your credit score by making timely payments or paying down debt. You can ask for a copy of your credit report to look for any errors that could be hurting your score.
  • Save more for a down payment. The minimum down payment you’ll need is contingent on which type of mortgage you are after. But if you can put down more than the minimum, you’ll likely get a better 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 seek opportunities to boost your income.
  • Pick a government-backed mortgage. You might think about a USDA loan (directed at low-to-moderate-income borrowers buying in a rural area), a VA loan (designed for military members and veterans), or an FHA loan (not designated for any particular group). Government-backed mortgages frequently come with better interest rates than conventional mortgages. As a bonus, down payments aren’t needed for USDA or VA loans.

If you’re financially ready, you can secure a great rate — but there’s no need to hurry.

If you get a 15-year fixed mortgage, it will take you a decade and a half to pay off your loan and your interest rate will remain locked in the whole time.

A 15-year fixed mortgage will cost less overall than a 30-year term. You’ll get a lower interest rate and you’ll pay off the mortgage in half the time, which will save you years of interest payments.

On the other hand, your monthly payments will be higher with a 15-year term than with a 30-year term, as you’ll pay off the same loan principal in half of the time.

With a 30-year fixed mortgage, you’ll pay off your mortgage over 30 years, and you’ll pay the same interest rate for the life of the loan. A 30-year term has a higher interest rate than a shorter term.

You’ll cough up more in interest with a 30-year fixed mortgage than with a 15-year fixed mortgage, as you’re paying a higher interest rate for an extended period.

On the flip side, you’ll pay less per month with a 30-year term than with a 15-year fixed term because you’re dividing your payments over more years.

A fixed-rate mortgage secures your rate for your entire loan period. But with an adjustable-rate mortgage, you’ll pay a constant rate for a predetermined period, then that rate will change periodically. A 10/1 ARM locks in your rate for a decade. Then your rate will fluctuate annually.

ARM rates are now at all-time lows, but you might still want to go for a fixed-rate mortgage. You can escape the hassle of a rate increase down the line with an ARM and secure a low rate for 15 or 30 years.

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

While you can lock in a low rate now, you should be financially prepared before doing so.

Mortgage and refinance rates by state

Check the latest rates in your state at the links below.

New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Rhode Island
South Carolina
South Dakota
Washington DC
West Virginia

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 Sunday, March 21 »

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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