Today’s Mortgage and Refinance Rate: October 6, 2021

Mortgage and refinance rates are low today. Rates tend to be low when the U.S. economy is struggling, as was the case during the COVID-19 pandemic.

September marked the fifth consecutive month the United States created more jobs. Could mortgage rates rise soon as the economy creates new jobs? Probably not.

Yes, the country created 661,000 jobs last month, but economists predicted 859,000 new jobs in September. The US economy is still actively recovering, but progress is slowing. Mortgage rates will likely remain low for the remainder of 2021.

Mortgage rates today

Money.com conventional rates; RedVentures government guaranteed rates.

Today’s refinance rate

Money.com conventional rates; RedVentures government guaranteed rates.

Is Now a Good Time to Buy a Home?

The United States is currently a sellers market, which means there are more buyers than homes for sale. As a result, houses are expensive and bidding wars are competitive. If you don’t have enough money for a down payment on a home you love, now might not be the best time to buy a home.

However, it can be a good time if you are financially prepared to put the money in and accept monthly payments. Mortgage rates are always at their lowest, so you could save money on interest by buying now rather than waiting for rates to rise.

Is Now the Right Time to Refinance?

It depends on your situation, but in general, yes, it’s a good time to refinance your mortgage. Refinancing rates are at their lowest. If you can get a significantly lower rate by refinancing, you may want to do so.

Keep in mind that refinancing will probably only be worth it if you plan to stay in the home for at least a few more years. You’ll pay the closing costs when you refinance, so you want to stay in the house long enough that the amount you save in interest is more than the amount you pay at closing. Otherwise, you could lose money refinancing.

How to get the lowest refinance rate?

Obtaining the lowest possible refinancing rate falls into three main categories:

  • Home equity: Most lenders require that you have at least 20% of the equity in your home to refinance it, but if you have even more equity, you could be rewarded with a lower rate. You can find ways to increase the value of your home (such as with home improvements) or make additional payments to have more equity in your home.
  • Credit score: The higher your credit score, the lower your interest rate could be. Check your credit report or use a free website like Credit Karma to see what needs improvement to get your score up.
  • Debt-to-income ratio: Your DTI ratio is the amount you pay for your debts each month divided by your gross monthly income. Most refinance lenders want to see a DTI ratio of 36% or less, but the lower your ratio, the better your rate will be. You can either find ways to make more money or pay off debt to lower your ratio.

Improvement in all three of these categories will help you get the best refinance rate, which could be a good time to refinance your mortgage.


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