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For first-time homebuyers or borrowers with low credit scores or low income, FHA mortgages offer an affordable way to purchase a home. See the latest FHA interest rates to find out how much you could save on your monthly mortgage payment with one of these loans.
FHA interest rates today
Average 30-year FHA interest rates were around 6.44% in November, according to Zillow data — nearly 70 basis points below the average rate on a conventional 30-year mortgage.
Rates fell across the board last month. FHA rates were around 20 basis points lower in November than they were in October. Rates have eased even further in recent weeks.
Compare current FHA interest rates
Here's how today's FHA loan rates compare to to other types of mortgages.
FHA vs. conventional interest rates
Rates on government-backed mortgages like the FHA loan are typically lower than conventional mortgage rates. Because mortgage rates are still relatively high, getting an FHA loan and the lower rates that come with it can help borrowers save money each month.
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How FHA loan interest rates are determined
Mortgage interest rates are influenced both by larger economic factors as well as the borrower's individual financial profile, including their credit score, debt-to-income ratio (DTI), and down payment.
FHA rates tend to be lower than conventional rates because the Federal Housing Administration, which oversees the FHA loan program, insures these mortgages. This means that private lenders are protected from the risk of borrower default, so they can afford to offer lower rates.
How to get a good FHA loan rate
While you can't control the market trends that move mortgage rates, there may be things you can do with your credit and finances that can help you score a better FHA rate.
Increasing your credit score and paying down debt to lower your DTI can make a big impact on the range of rates available to you. Saving up for a larger down payment can also help.
It's also important that you get preapproved for a mortgage with multiple lenders. This allows you to compare offers and make sure you're getting the best deal.
How to qualify for an FHA loan
To get an FHA loan, you'll usually need:
- A credit score of at least 580
- A down payment of at least 3.5%
- A DTI of 43% or lower
If you put down 10%, you may be able to qualify with a credit score as low as 500. You may also be able to get an FHA loan with a higher DTI if you have compensating factors, such as cash reserves. This means that you have money in your bank account to cover your monthly mortgage payments should you suddenly lose your source of income.
FHA loan benefits and drawbacks
The FHA's more lenient credit requirements for its insured mortgages make buying a home more accessible to those with less-than-ideal credit or large amounts of debt. The lower rates and low down payment that come with these loans are also beneficial for borrowers.
But FHA loans do come with some additional costs that can make them more expensive for borrowers with great credit and large down payments.
"Generally, an FHA loan rate will be lower than a conventional loan rate," says Mason Whitehead, a Dallas-based branch manager for Churchill Mortgage. "However, that can be a bit deceptive, because the closing costs and fees with FHA are much higher than on a standard, conventional loan."
FHA loans come with both upfront and annual mortgage insurance. The upfront mortgage insurance premium is equal to 1.75% of the loan amount. This fee can be paid at closing or financed into the loan amount.
Your annual FHA mortgage insurance premium amount will be based on your loan amount, loan-to-value ratio, and term length. With a minimum down payment on a 30-year mortgage that's less than $625,500, you'll pay 0.85% of the loan amount each year.
"Monthly mortgage insurance with FHA is generally more expensive than with a conventional loan because it is a fixed rate no matter your credit score," says Whitehead.
Mortgage calculator
Our free mortgage calculator can help you compare monthly costs based on your down payment, interest rate, and the purchase price of the home.
FHA loan frequently asked questions
What is the FHA interest rate today?
Like all mortgage rates, FHA interest rates can fluctuate quite a bit from one day to the next (or even from one hour to the next). But in general, FHA rates have been lower than rates on other types of mortgages, making them a good deal for borrowers who qualify.
Is FHA always 3.5% down?
A 3.5% down payment is the lowest an FHA loan will allow, but you can always put more down if you want to. If you have a score that's below 580, you'll need to put at least 10% down to qualify for an FHA loan.
Do FHA loans have lower interest rates?
FHA loans typically have lower interest rates than conventional loans, and they're often close to VA mortgage rates.
Do FHA interest rates vary by lender?
Yes, FHA interest rates vary by lender. Though the Federal Housing Administration insures FHA mortgages, it doesn't set the rates offered by lenders.
