Personal finance

Today’s mortgage and refinance rates: May 13, 2021 | Rates trend downward

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Mortgage and refinance rates are down since last Thursday. They’ve also trended downward since this time last month.

Low mortgage rates are usually signs of a struggling economy, so rates should stay low for the foreseeable future.

Employment numbers and inflation need to consistently improve for the US economy to bounce back from the COVID-19 pandemic. The country didn’t create nearly as many jobs as expected in April, so it will take some time for the economy to recover. For now, expect rates to stay low.

But because today’s rates are low, it could be a great time to buy or refinance if you’re ready. You can apply for preapproval and lock in an all-time low mortgage rate.

Conventional rates from; government-backed rates from RedVentures.

Learn more and get offers from multiple lenders »

You can probably get a 30-year mortgage rate well under 4%, and a 15-year rate under 3%.

Rates for conventional mortgages, which you may consider “normal mortgages,” are already low right now. But government-backed mortgages through the FHA and VA usually pay even lower rates, depending on which term length you choose.

Conventional rates from; government-backed rates from RedVentures.

Compare offers from refinancing lenders »

Fixed refinance rates are much lower than adjustable rates. It’s probably best to refinance into a fixed-rate mortgage.

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 trendsMortgage rate trends

All mortgage rates have remained about steady or decreased since last Thursday. Rates are down even more significantly since this time last month.

Refinance rate trends

Refinance rates for ARMs are also lower than they were last Thursday and since this time last month. Refinance rates for fixed-rate loans have remained steady or risen since last week, although they’ve fallen since last month.

If you get a 15-year fixed mortgage, it will take you 15 years 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.

A 30-year fixed mortgage locks in your mortgage rate, so you’ll pay the same rate for 30 years.

A 30-year mortgage comes with smaller monthly payments than a 15-year mortgage, because you’re spreading payments out over a longer period of time.

But you’ll pay more on a 30-year term in the long run. Longer terms charge higher rates, so you’ll pay a higher rate for twice the length of time.

A fixed-rate mortgage locks in your rate for the entire life of your loan. But an adjustable-rate mortgage keeps your rate the same for a set amount of time, then changes it regularly. A 10/1 ARM has a set rate for the first 10 years. Then the rate fluctuates annually.

ARM rates are at all-time lows now, but it’s still probably better to get a fixed-rate mortgage.

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 risk your rate increasing later with an AR

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

We’re also displaying rates for FHA and VA mortgages. These are two kinds of government-backed mortgages. Another type is a USDA mortgage, a less common loan for buyers who live in rural areas.

Government-backed mortgages are backed by government agencies. If you default on your payments, the agency pays the lender back. Because these mortgages are less risky than conventional mortgages, lenders have lower requirements for your credit score, debt-to-income ratio, or down payment. They also often have lower interest rates.

Government home loans can be great deals if you qualify. Here are your options:

  • FHA mortgage: This type of loan 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: You may qualify if you’re an active military member or veteran.
  • USDA mortgage: You’ll be eligible 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.

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

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, and bank reviews. In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership.

Best Mortgage Rates Today: Friday May 14, 2021

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.

Conventional rates from; government-backed rates from RedVentures.


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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