Today’s mortgage and refinance rates are low overall, although fixed rates are significantly lower than adjustable rates. It could be a good day to lock in a historically low rate.

Mortgage rates could start to increase later this fall. To take advantage of today’s low interest rates, apply for preapproval with at least one lender to lock in a rate.

How mortgage rates work

A mortgage interest rate is the fee a lender charges for borrowing money, expressed as a percentage. For example, you get a mortgage for $300,000 with an interest rate of 2.5%.

Mortgage rates can be either fixed or adjustable. A fixed-rate mortgage keeps your rate the same for the entire length of your loan. An adjustable-rate mortgage locks in your rate for the first few years or so, then changes it periodically. With a 7/1 ARM, your rate would stay steady for the first seven years, then shift annually.

The longer your mortgage term, the higher your rate will be. For instance, you’ll pay more on a 30-year mortgage than a 15-year mortgage. Longer terms do come with lower monthly payments, though, because you’re spreading out the repayment process.

Today’s mortgage and refinance rates

Today’s mortgage rates

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

Today’s refinance rates

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

How to get the best mortgage rate

Here are a few steps you can take to get the best mortgage rate possible:

• Get a fixed-rate mortgage. You can ask your specific lender about its fixed rates vs. adjustable rates. But in general, fixed rates are starting lower than adjustable ones. Rates are also at all-time lows, so you would lock in a low rate instead of risking an increase later with an ARM.
• Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to boost your credit score or lower your debt-to-income ratio, if necessary. Saving for a higher down payment also helps.
• Choose the right lender. Each lender charges different mortgage rates. Picking the right one for your financial situation will help you land a good rate.

How to choose a mortgage lender

First, think about what type of mortgage you want. The best mortgage lender will be different for an FHA mortgage than for a VA mortgage.

A lender should be relatively affordable. You shouldn’t need a super high credit score or down payment to get a loan. You also want it to offer good rates and charge reasonable fees.

Once you’re ready to start shopping for homes, apply for preapproval with your top three or four choices. A preapproval letter states that the lender would like to lend you up to a certain amount, at a specific interest rate. When you’re preapproved, your mortgage rate is locked in for 60 to 90 days. With a few preapproval letters in hand, you can compare each lender’s offer.

When you apply for preapproval, a lender does a hard credit inquiry. A bunch of hard inquiries on your report can hurt your credit score — unless it’s for the sake of shopping for the best rate.

If you limit your rate shopping to a month or so, credit bureaus will understand that you’re looking for a home and shouldn’t hold each individual inquiry against you.