Skip to Main Content

FHA loan rates

On Wednesday, June 19, 2024, the national average 30-year FHA mortgage APR is 7.04%. The average 30-year FHA refinance APR is 7.13%, according to Bankrate's ... latest survey of the nation's largest mortgage lenders.

Current FHA loan rates

Since the pandemic, rates on FHA loans have bounced around — from less than 3 percent during the pandemic to 8 percent in October 2023. For most of early 2024, FHA mortgage rates have hovered around 7 percent. The table below brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive FHA loan rates. This interest rate table is updated daily to give you the most current rates when choosing an FHA mortgage home loan.

Product Interest Rate APR
30-Year FHA Rate 7.00% 7.04%
30-Year Fixed Rate 6.94% 6.99%
15-Year Fixed Rate 6.38% 6.46%
5/1 ARM Rate 6.53% 6.53%
30-Year VA Rate 7.09% 7.13%

Rates as of Wednesday, June 19, 2024 at 6:30 AM

FHA loans vs. conventional loans

FHA loans can have lower interest rates than conventional loans, but they also have higher upfront costs. How do FHA loans compare to 30-year fixed mortgages? See the table below for an example of the costs associated with an FHA loan versus a 30-year fixed loan. Keep in mind that interest rates are dependent on the market and the borrower's creditworthiness.

  30-year fixed FHA loan 30-year fixed conventional loan
Assumptions: FHA loan includes 3.5% down, 1.75% upfront mortgage insurance premium rolled into the loan amount, annual mortgage insurance premium of 0.55% for the first 10 years of the loan. Conventional loan assumes 5% down and 1% annual private mortgage insurance premium for the first five years.
Home price $400,000 $400,000
Loan amount $393,000 $380,000
Interest rate 6.875% 7%
Monthly payment (Principal and interest) $2,912 $2,850
Monthly mortgage insurance $180 $317
Total monthly payment $3,092 $3,167
Total interest $655,283 $646,104
Total mortgage insurance $28,355 $19,000
Total cost $1,076,638 $1,045,104

 

If you qualify for both a conventional and FHA loan, which should you choose?


Principal writer, Home Lending

If you qualify for both, I’d almost certainly go for the conventional loan. FHA’s hefty mortgage insurance (MIP) includes 1.75 percent of the loan amount upfront, plus monthly premiums. FHA loans are a great option for borrowers with sub-700 credit scores and not a lot of cash for a down payment, but the downside is the MIP, which FHA charges because of the higher risk factor. If you can get a conventional loan, you’ll find that the private mortgage insurance (PMI) costs less and is easier to get rid of once your loan-to-value (LTV) ratio hits 80 percent. For borrowers who don’t qualify for a conventional loan, the smart move is to take the FHA loan, then refi into a conventional loan once your credit improves and the LTV ratio looks better.

FHA loan requirements

  • FHA loan limits: $498,257 for a single-family home; higher in costlier counties and for multifamily homes
  • Minimum credit score: 580 with a 3.5% down payment, or 500 with a 10% down payment
  • Maximum debt-to-income (DTI) ratio: Up to 50%
  • Mortgage insurance premiums (MIP): 1.75% of your loan principal upfront; monthly premiums thereafter based on amount you borrow, down payment and loan term and type
  • Financial and work history: Proof of consistent employment and income

FHA mortgage insurance

FHA loans require borrowers who put down less than 20 percent to pay mortgage insurance premiums (MIP). Mortgage insurance costs add a meaningful amount to your monthly payment, so keep these costs in mind when you’re budgeting for a home.

There are two types of premiums: the upfront mortgage insurance premium (1.75 percent of the base loan amount) and an annual mortgage insurance premium (0.15 percent to 0.75 percent, depending on the loan term, loan amount and the loan-to-value (LTV) ratio). The annual premium is owed for the loan’s lifetime if your down payment is less than 10 percent; if you put down at least 10 percent, however, the premiums can be removed after 11 years.

FHA loan limits

Each year, the FHA updates its lending limits or the maximum amount the agency will insure for a given area and property type. These limits are influenced by mortgage market-makers Fannie Mae and Freddie Mac’s conforming loan limits. For 2024, the national ceiling is $498,257 for a single-family home, and up to $1,149,825 in high-cost areas.

Should you get an FHA loan?

FHA loans are aimed at certain types of borrowers. Some ways to know if this option is for you include:

  • Your credit score is below 700 (but above 580)
  • You have limited down payment savings (but enough to pay 3.5 percent, plus closing costs)
  • You don’t mind the tradeoff of higher mortgage insurance premiums for looser underwriting criteria
  • You’re a first-time buyer

Pros of FHA loans

  • Low down payment requirement
  • Friendly to first-time homebuyers (includes those who have not owned a home for at least three years)
  • Financing for mobile homes and factory-built homes
  • May accommodate people who own the land where the home will be located and those who live in a mobile home park
  • Can lock in a low rate without a large down payment

Cons of FHA loans

  • Borrower required to pay two types of mortgage insurance: an upfront mortgage insurance premium (MIP) and an annual premium
  • Require that the house meet certain standards, which decreases buying options

How to get the best FHA loan rate

  1. Work on your credit score. For the most competitive FHA rate, you’ll need good to excellent credit, though you can still qualify with a score as low as 580.
  2. Improve your debt-to-income (DTI) ratio. Generally, the lower your DTI ratio, the better your rate.
  3. Shop around and compare multiple offers. This step can save you thousands of dollars over the life of the loan. Consider the interest rate as well as the annual percentage rate (APR). The latter accounts for the lender’s fees. Be sure to read customer reviews on lenders as well for additional insight.

Lender compare

Compare mortgage lenders side by side

Mortgage rates and fees can vary widely across lenders. To help you find the right one for your needs, use this tool to compare lenders based on a variety of factors. Bankrate has reviewed and partners with these lenders, and the two lenders shown first have the highest combined Bankrate Score and customer ratings. You can use the drop downs to explore beyond these lenders and find the best option for you.

Caret DownCaret Up
Garden State Home Loans

NMLS: 473163

State License: MB-473163

3.6

Rating: 3.6 stars out of 5
  • Star
  • Star
  • Star
  • Star
  • Star
  • Star Empty
  • Star Empty
  • Star Empty
  • Star Empty
  • Star Empty
Bankrate Score
Info

Recent Customer Reviews

Info
Rating: 4.98 stars out of 5

5.0

562reviews

Caret DownCaret Up
Homefinity

NMLS: 2289

State License: 4965

4.5

Rating: 4.5 stars out of 5
  • Star
  • Star
  • Star
  • Star
  • Star
  • Star Empty
  • Star Empty
  • Star Empty
  • Star Empty
  • Star Empty
Bankrate Score
Info

Recent Customer Reviews

Info
Rating: 4.94 stars out of 5

4.9

1064reviews

FHA loan FAQ

Meet our Bankrate experts

Written by: Jeff Ostrowski, Principal Reporter, Mortgages

I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.

Read more from Jeff Ostrowski

Edited by: Laurie Dupnock, Editor, Home Lending

I’ve spent five years in writing and editing roles, and I now focus on mortgage, mortgage relief, homebuying and mortgage refinancing topics. I’m most interested in providing resources for aspiring first-time homeowners to help demystify the homebuying process. In 2021, I earned a Poynter ACES Certificate in Editing. I have an MA in English. 

Read more from Laurie Dupnock