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Since last Monday, the majority of mortgage and refinance rates have gone down. They have also largely decreased from this point last month.

Rates remain low across the board, so it might be a good day to apply for preapproval and lock in a low rate.

You'll probably want to apply for a fixed-rate mortgage rather than an adjustable-rate one. Fixed rates are starting lower than adjustable rates right now, and you won't risk your rate increasing in a few years.

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You don't need to rush to take advantage of today's low rates if you aren't ready to buy or refinance, though. Rates should stay low until late summer or even fall.

Mortgage rates for Monday, May 31, 2021

2.40%
3.29%
4.20%
3.66%
2.85%
2.75%

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

Learn more and get offers from multiple lenders »

You can lock in a rate below 2.50% on a 15-year fixed mortgage, which is historically low.

Rates for conventional mortgages , which you may consider "standard mortgages," are already low. But you can frequently get an even lower rate with a government-backed mortgage through the FHA or VA , contingent on which term length you are after. Government mortgages are great options if you are eligible.

Refinance rates for Monday, May 31, 2021

2.60%
3.64%
4.31%
4.26%
2.85%
2.77%

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

Compare offers from refinancing lenders »

Both 15-year and 30-year fixed refinance rates are significantly better deals than adjustable rates right now, so you may want to consider a fixed-rate mortgage if you're looking to refinance.

Ways to get the lowest rate possible

You could lock in an all-time low mortgage rate today if your finances are in order.

But rates will probably remain low for several months, so you don't need to hurry if you aren't ready to buy or refinance yet. You might have time to boost your finances, which will get you an improved rate.

Here are some tips to improve your financial situation:

  • Increase your credit score by paying all your bills in a timely fashion. Aggressively paying down debts or letting your credit age could also help your score.
  • Put down more for a down payment . The minimum down payment you'll need to pay will be contingent on which type of mortgage you are after. Lenders frequently will give you better rates if you have more than the minimum.
  • Lower your debt-to-income ratio. Your DTI ratio is the amount you pay toward debts each month, divided by your gross monthly income. A lot of lenders want you to have a DTI ratio of 36% or less (although it depends on the type of mortgage). To improve your ratio, pay down debts or think about ways to earn more money.

You can get a low mortgage rate if your finances are in a good place, and you likely have time to make improvements and get a better rate.

Mortgage and refinance rates trends

Mortgage rate trends

2.40% 2.48% 2.52%
3.29% 3.36% 3.42%
4.20% 4.12% 4.32%
3.66% 3.84% 4.18%
2.85% 2.71% 2.93%
2.75% 2.77% 2.74%

The majority of mortgage rates have decreased since last week, with the exception of the FHA rate. Since this point last month, most rates have also gone down.

Refinance rate trends

2.60% 2.66% 2.71%
3.64% 3.74% 3.81%
4.31% 4.34% 4.52%
4.26% 4.42% 4.80%
2.85% 2.73% 2.89%
2.77% 2.77% 2.73%

Since last Friday and last month, fixed and adjustable refinance rates have dropped. The FHA rate has ticked up since last week, and the VA rate has remained the same.

How do 15-year fixed-rate mortgages work?

If you get a 15-year fixed mortgage , it will take you 15 years to pay down your mortgage, and your interest rate will remain the same the whole time.

You'll make higher monthly payments with a 15-year term than a 30-year term because you'll pay off the same loan principal in fewer years.

On the flip side, your total cost will be less with a 15-year fixed mortgage than a longer term. You'll pay down the mortgage in less time and get a lower interest rate to boot.

How do 30-year fixed-rate mortgages work?

With a 30-year fixed mortgage , you'll pay a set interest rate over three decades. A 30-year term comes with a higher interest rate than a 15-year term.

Your monthly payments will be higher with a 30-year fixed mortgage than with a 15-year fixed mortgage, as you're paying a higher interest rate for more years.

However, you'll make smaller monthly payments with a 30-year term than with a shorter term, because you're splitting up your payments over an extended period.

How do ARMs work?

An adjustable-rate mortgage, commonly known as an ARM, will lock in your rate for an agreed-upon period. Then your rate will fluctuate periodically. A 7/1 ARM sets your rate for seven years, then your rate will change once per year.

Though ARM rates are at striking lows, you might still prefer a fixed-rate mortgage. You can get a low rate for 15 or 30 years without chancing a future rate increase with an ARM.

If you're considering getting an ARM , talk to your lender about what your rates would be if you chose a fixed-rate versus an adjustable-rate mortgage.

How do government-backed mortgages work?

We're also giving you rates for FHA and VA mortgages. These are two types 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 repays your lender. Because these mortgages are safer than standard mortgages, lenders have more lenient requirements for your credit score, debt-to-income ratio, or down payment. They also frequently come with lower interest rates.

Government-backed mortgages can be great choices if you're eligible. Here are your options:

  • FHA mortgage : This type of loan isn't limited to a specific type of person. But it's especially useful if your credit score isn't good enough to qualify for a conventional mortgage.
  • VA mortgage : You might be eligible if you're an active military member or veteran.
  • USDA mortgage : You'll 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.

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: Monday May 31, 2021

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