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FHA refinance rates
By Dhara Singh
On Tuesday, January 25, 2022, the national average 30-year FHA refinance APR is 4.020%. The average 30-year fixed FHA mortgage APR is 4.000%, according to Bankrate’s latest survey of the nation’s largest refinance lenders.
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Today’s FHA refinance rates
The table below brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive FHA refinance rates. This interest rate table is updated daily to give you the most current rates when choosing an FHA refinance home loan.
|30-Year FHA Rate||3.160%||4.000%|
|30-Year Fixed Rate||3.680%||3.730%|
|20-Year Fixed Rate||3.540%||3.590%|
|15-Year Fixed Rate||3.020%||3.140%|
|10/1 ARM Rate||3.180%||4.040%|
|7/1 ARM Rate||2.950%||3.980%|
|5/1 ARM Rate||2.790%||4.070%|
|30-Year VA Rate||3.180%||3.310%|
|30-Year Fixed Jumbo Rate||3.670%||3.740%|
|15-Year Fixed Jumbo Rate||3.060%||3.110%|
|7/1 ARM Jumbo Rate||2.960%||3.990%|
|5/1 ARM Jumbo Rate||2.740%||4.040%|
Rates as of January 25th, 2022 at 6:30 AM
Top 5 Bankrate FHA refinance lenders
- Cardinal Financial Company – Best non-bank lender
- Cherry Creek Mortgage – Best for low-credit score borrowers
- LowRates.com – Best online lender
- Fairway Independent Mortgage Corporation – Best overall
- Garden State Home Loans – Best no-fee lender
Bankrate helps thousands of borrowers find mortgage and refinance lenders every day. To determine the top mortgage lenders, we analyzed proprietary data across more than 150 lenders to assess which on our platform received the most inquiries within a three-month period. We then assigned superlatives based on factors such as fees, products offered, convenience and other criteria. These top lenders are updated regularly.
Cardinal Financial Company – Best non-bank lender
Cardinal Financial Company, also known as Sebonic Financial, offers refinancing for conventional and government-insured loans, including FHA streamline refinances.
Strengths: Cardinal Financial offers a range of refinancing options, including FHA, VA and USDA streamline refinances and CEMA loans in New York, and the lender’s proprietary system, called Octane, helps you monitor your loan status and keep track of next steps and necessary documents.
Weaknesses: Cardinal Financial doesn’t offer home equity lines of credit (HELOCs) or home equity loans, which could be alternatives to an FHA refi. Additionally, as opposed to other lenders that allow you to see daily rates online, you’ll have to connect with a loan originator to see rates from this lender.
Read Bankrate's full Cardinal Financial Company mortgage review
Cherry Creek Mortgage – Best for low-credit score borrowers
Cherry Creek Mortgage offers mortgages and refinancing in several states, including its headquarters state of Colorado. You might know the lender by other names, including Blue Spot Home Loans.
Strengths: If your credit score could use a boost before you refinance, Cherry Creek Mortgage offers a free downloadable guide on ways to improve it. Backed by the deep expertise of its loan officers, the lender also encourages borrowers to apply for a loan or refi even if their credit needs work.
Weaknesses: Cherry Creek Mortgage is only licensed in 33 states, so confirm availability before comparing refi offers from this lender.
Read Bankrate's full Cherry Creek Mortgage review
LowRates.com – Best online lender
Operated by Sun West Mortgage Company, LowRates.com is an online mortgage lender licensed in 48 states, Puerto Rico and the U.S. Virgin Islands. Sun West was founded in 1980.
Strengths: LowRates.com showcases daily refinance rates for FHA, VA and conventional loans, and its website includes helpful content, including an FHA loan overview and refinancing guide.
Weaknesses: Borrowers with lower credit scores might have a harder time getting approved for a refinance.
Read Bankrate's full LowRates.com Mmrtgage review
Fairway Independent Mortgage Corporation – Best overall
Fairway Independent Mortgage Corporation, which also does business as Homefinity, lends in all 50 states and Washington, D.C.
Strengths: Fairway Independent Mortgage Corporation has a robust network of loan officers across more than 400 branches to help with an FHA refinance, and its application process is easy to follow online.
Weaknesses: If you’re looking to continue your relationship with the lender after closing, know that it doesn’t service loans in every state it’s licensed in.
Read Bankrate's full Fairway Independent Mortgage Corporation review
Garden State Home Loans – Best no-fee lender
Garden State Home Loans has a single brick-and-mortar location in New Jersey and is licensed to issue loans in New Jersey, Connecticut, Delaware, Florida, Maryland, Michigan, New York and Pennsylvania.
Strengths: Garden State Home Loans has “minimal” fees, according to its website, and absolutely no hidden or surprise costs. The lender is available seven days a week to answer questions about refinancing, and if you’re not based in New Jersey, you’ll be able to talk to a live representative via chat online.
Weaknesses: Garden State Home Loans is available in a small number of states, and in order to learn current refinance rates, you’ll need to fill out a form online or email or call the lender.
Read Bankrate's full Garden State Home Loans review
What is an FHA refinance?
An FHA refinance is a refinance of an FHA loan in which you change the interest rate and/or other terms of the loan. FHA is short for the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development. The FHA loan category began in the 1930s to boost home sales. The U.S. government doesn’t make the loans, but but rather insures them.
“The program was created for low- to moderate-income first-time homebuyers that have less established credit and are interested in lower down payment options,” explains Robert Heck, head of origination at Morty, a mortgage technology platform.
FHA refinance rates and loans are available to those who put down less than 20 percent for their down payment. (Borrowers can put down as little as 3.5 percent.) Because of this lower down payment, all FHA mortgage holders are required to pay into the FHA-run mortgage insurance fund. “This requires an upfront payment that can be financed into the loan amount as well as monthly insurance payments,” Heck says. “The amounts required vary upon down payment percentage.”
If you’re considering an FHA refinance, you’ll want to monitor FHA refinance rates, since they fluctuate. There are several variables to consider when you’re deciding between 20-year or 30-year conventional mortgage rates and FHA refinance rates. Both kinds offer fixed- and variable-rate mortgages, and interest rates can vary based on the FHA lender you select, your credit score and the market. Regardless of what loan option you choose, it’s important to include all of the expenses associated with your mortgage (HOA fees, mortgage insurance and homeowners insurance) to determine what fits comfortably in your budget.
The availability of FHA refinance rates today can be good news for borrowers who think they can’t qualify for a loan. “Borrowers that have lower or less-established credit, as well as individuals looking to put less down, benefit the most from FHA loans, (as) 3.5 percent is the minimum down payment,” Heck explains. “But down payment assistance programs are allowed and can help reduce total closing costs further.”
How much does an FHA refinance cost vs. save?
How much you stand to save with an FHA refinance and how much it can cost depends on a variety of factors, including current FHA refinance rates and which kind of product you choose.
“Refinancing into a lower interest rate and shorter-term product will help you save on interest costs over the life of the loan,” Heck says, though it may not lower your monthly payments. He adds that if lowering monthly payments is the goal with a refi, it’s usually “most beneficial to do so in the first three to five years” from when you took out the original loan and restart the clock with a similar length of term. The reason: Interest charges are front-loaded into the early years of a mortgage, so you avoid the risk of paying a lot more in interest if you, say, refinance into another 30-year mortgage that only has 20 years left.
You’ll also want to evaluate the required mortgage insurance — both monthly and over the life of the loan — since that can be a significant expense. Closing costs are another factor and will vary according to your lender.
Regarding timing, it’s smart to shop FHA refinance rates and see how they trend over time. It’s always important to shop around to find a lender that suits your needs. This can mean banks or non-banks, which handle the majority of FHA loans.
A distinct downside: Mortgage insurance premiums (MIP)
One downside of an FHA refinance loan is that all FHA loans require mortgage insurance, meaning a costly mortgage insurance premium paid by borrowers. By contrast, conventional loans only require insurance, known as private mortgage insurance (PMI), if the down payment is less than 20 percent of the property's purchase.
Each FHA loan requires both an upfront premium of 1.75 percent of the loan amount plus an annual premium of 0.45 percent to 1.05 percent. Exactly when these costs lapse is determined by the term of the loan, amount borrowed and the loan-to-value ratio.
These premiums can add significantly to the costs of the loan and your monthly payment. If you’re already paying PMI on your mortgage, this might not be as big a deal, depending on the relative costs, because you’re replacing one premium with another. But if you put 20 percent down on your existing mortgage and thus pay no insurance premiums — or you’ve built up enough equity to get your lender to cease to require these premiums — this FHA requirement could give you pause and prompt you to consider other financing avenues to avoid this cost.
Written by: Dhara Singh, mortgage reporter for Bankrate
|Loan Type||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help you learn more about rates by loan type.|
|30-Year Loan||30-Year Mortgage Rates||30-Year Refinance Rates|
|20-Year Loan||20-Year Mortgage Rates||20-Year Refinance Rates|
|15-Year Loan||15-Year Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||10-Year Mortgage Rates||10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Rates||FHA Refinance Rates|
|30-Year FHA Loan||30-Year FHA Loan Rates||30-Year FHA Refinance Rates|
|VA Loan||VA Mortgage Rates||VA Refinance Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refinance Rates|
|5/1 ARM||5/1 ARM Rates||5/1 Refinance Rates|
|7/1 ARM||7/1 ARM Rates||7/1 Refinance Rates|
|10/1 ARM||10/1 ARM Rates||10/1 Refinance Rates|
|Jumbo Loan||Jumbo Mortgage Rates||Jumbo Refinance Rates|
|30-Year Jumbo Loan||30-Year Jumbo Loan Rates||30-Year Jumbo Refinance Rates|
- 30-year mortgage rates
- 20-year mortgage rates
- 15-year mortgage rates
- 10-year mortgage rates
- VA loan rates
- FHA loan rates
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