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What Is the FHA Loan Interest Rate Today?

Interest rate animationUse the FHA interest rate chart to compare today's FHA 30 & 15-year interest rates. FHA interest rates are usually lower than conventional interest rates because the FHA loans are backed by the federal government. The FHA down payment can be as low as 3.5% & there are no 1st time home buyer requirements

Are FHA rates lower than conventional interest rates?

The FHA interest rates tend to be lower than conventional (conforming) mortgages because the loan is backed by the Department of Housing and Urban Development (HUD). HUD reimburses FHA lenders a percentage of the loss if the borrower defaults on the mortgage. Because of the loss protection by the Federal government, lenders can be more generous with the interest rate. 

Are FHA rates based on credit score?

Yes. Here's an example of what one lender charges for different credit scores. The additional cost is paid at settlement; or the lender can offer you a higher interest rate in exchange for the additional cost.

CREDIT SCORE Interest Rate Adjustment Cost for $100,000 Loan
Credit Scores 600 to 619 2.250 $2,250.00
Credit Scores 620-639 2.000 $2,000.00
Credit Scores 640 to 679 0.375 $375.00
Credit Scores Greater than 720 0.000 $-

Are FHA rates the same everywhere?

No. Many home buyers believe that the FHA regulates the interest rate for FHA home loans, they do not. The interest rates are set by the FHA approved lenders. Some FHA lenders are especially fond of FHA mortgages and as such offer lower rates. Other lenders prefer other loan programs, and offer FHA mortgage out of convenience to their customers, but at a higher interest rate.

Are FHA rates fixed?

FHA loan program permits fixed and adjustable-rate mortgages. The FHA only permits 30 and 15-year terms. The FHA offers a standard 1-year ARM and four "hybrid" ARM products. Hybrid ARMs offer an initial interest rate that is "fixed" for the first 3-, 5-, 7-, or 10 years. After the initial period, the interest rate will adjust annually.

Can you buy down an FHA interest rate?

 Yes. Here's a generic example of buying down the FHA interest rate:

INTEREST RATE LOAN POINTS Cost for $100,000 Loan
5.00% 0.000 $-
4.75% 1.000 $1,000.00
4.50% 2.000 $2,000.00
4.25% 3.000 $3,000.00

You can learn more about discount points on the Should I Pay Points page

How often do the FHA rates change?

Market forces drive the FHA interest rates up and down. Just like the stock market. If bad news develops during the day, the FHA loan rate can change multiple times during the day.