Compare Todays FHA Loan Rates
National Average Mortgage Rates
Rates data is based on a borrower with good credit, a conforming loan amount (at least $200,000 but less than the national conforming loan amount), and a loan-to-value ratio of less than 80% (For purchase loans, this corresponds to a down payment of 20% or more). © Zillow, Inc., 2006-2016. Use is subject to Terms of Use
U.S. News Expert Insights, Week Ending July 15
Mortgage Rates Surge to Yearly Highs
“The average 30-year fixed mortgage rate is now hovering around 6.75%, compelling summer homebuyers to recalculate their purchase budgets. With mortgage rates now at their highest levels in about a year, and geopolitical uncertainty bleeding into the economy, prospective buyers may not feel motivated to jump into the market.
“New data substantiates this sense of unease as higher borrowing costs weigh on the housing sector. Mortgage applications have waned in recent weeks alongside rising rates, according to the Mortgage Bankers Association. Pending home sales decreased by 5.4% in June, per the National Association of Realtors.
“Today’s high mortgage rates are a result of the resurgence of the U.S. war in Iran. The Middle East conflict has led to higher oil prices, fueling inflation throughout the economy. Mortgage interest rates, which follow 10-year Treasury yields, are highly sensitive to price changes. The bottom line: mortgage rates will stay high due to the inflationary pressures of the war.”
– Erika Giovanetti, U.S. News Consumer Lending Analyst
Average Mortgage Rates, Daily
Data as of: 7/15/2026
Rates data is based on a borrower with good credit, a conforming loan amount (at least $200,000 but less than the national conforming loan amount), and a loan-to-value ratio of less than 80% (For purchase loans, this corresponds to a down payment of 20% or more). © Zillow, Inc., 2006-2016. Use is subject to Terms of Use
The Federal Housing Administration insures mortgage loans, protecting lenders against loss and enabling them to extend loans to more borrowers. Because FHA loans are backed by the federal government, lenders are able to extend mortgages to borrowers with lower credit scores and smaller down payments.
It’s possible to get an FHA loan with a down payment as low as 3.5% and a credit score of 580 or higher. With a credit score between 500 and 579, however, you’ll need to make a down payment of at least 10%.
The FHA also requires borrowers to pay a mortgage insurance premium that helps protect the lender against losses. On most FHA loans, this is an upfront charge of 1.75% of your loan amount, paid at closing or rolled into your loan, plus an annual premium that’s divided by 12 and added to your monthly payment.
The annual mortgage insurance premium is between 0.45% and 1.05% of the loan amount. If you make a down payment of at least 10%, you can eliminate this payment after 11 years, but for down payments under 10%, this fee must be paid for the duration of the mortgage term.
FHA loans usually have lower interest rates than conventional loans, but the total borrowing costs can be higher due to mortgage insurance premiums. And although conventional loans also require private mortgage insurance for down payments below 20%, it’s usually cheaper than the FHA’s mortgage insurance and may be easier to eliminate once you reach 80% equity.
In general, conventional loans may offer lower costs for borrowers with good credit, while FHA loans can bring homeownership within reach for those who have lower scores.
The example below shows how costs can vary between an FHA and a conventional loan on a $300,000 home.
| FHA Loan | Conventional Loan | |
| Minimum Down Payment ($) | 3.5% ($10,500) | 3% ($9,000) |
| Interest Rate | 6% | 6.15% |
| Upfront Mortgage Insurance | 1.75% ($5,250) | Not required |
| Annual Mortgage Insurance | 0.85% ($2,550, or $212.50/month) | 0.75% ($2,250, or $187.50/month) |
| Interest Paid Over 5 Years | $85,381 | $88,047 |
The borrower in the example above would save about $2,665 in interest charges over the first five years of the mortgage by choosing an FHA loan with a lower rate, but that savings would be offset by the upfront MIP of $5,250 and higher monthly mortgage insurance.
When you’re weighing borrowing an FHA or conventional loan for your home purchase, be sure to get loan estimates from a few lenders to compare APRs and closing costs. You’ll want to consider your unique financial situation, including your credit history and how long you plan to live in the home before selling or refinancing.
One of the benefits of FHA loans is that they typically have more lenient qualification standards than conventional loans. This is possible since these loans are backed by FHA mortgage insurance, taking some of the risk off of lenders. If the homeowner defaults on their mortgage payment, this insurance covers the unpaid principal on the loan.
“Most FHA-approved lenders require a minimum credit score of 580,” says Anna DeSimone, housing finance author and expert in fair lending compliance. “However, FHA will insure loans with borrowers who have a credit score as low as 500, or have had collection accounts or judgments.”
If you do have judgments or loans in collections, you will need to provide a written letter explaining the circumstances. You’ll also need to make a higher down payment – at least 10% – if your credit score is below 580. With a higher score, the minimum down payment is just 3.5%.
Even if you have no credit score, it’s possible to get a loan through an FHA lender, DeSimone says. In this case, the lender can consider a non-traditional mortgage credit report, which can include proof of timely payments for rent, household bills, including your cable TV and electricity, and more.
That said, the average borrower credit score for FHA home purchase loans between fiscal years 2016 and 2022 was 673, according to HUD data.
In addition to credit score requirements, the FHA considers your debt-to-income ratio, or DTI, which is your monthly debt, including your mortgage or rent, divided by your monthly gross income. . In general, your DTI cannot exceed 43%, meaning your total obligations, including your mortgage, are no more than 43% of your total gross income.
However, if your credit score is 580 or higher, the DTI may be stretched based on certain criteria, such as whether you’re purchasing an energy-efficient home, have large cash reserves or no debt outside of your house payment, or your new home purchase would represent a minimal increase in your overall housing payment. With compensating factors, it’s possible to get a loan with a DTI as high as 57%.
FHA lenders also look at your mortgage payment ratio, or PTI, which is the ratio of your mortgage payment to your gross income. It’s generally capped at 31%, although highly-qualified borrowers with compensating factors, such as energy-efficient homes, may be allowed to stretch the ratio to 40%.
To improve your chances of qualifying for an FHA loan, take the following steps:
- Build and maintain good credit.
- Secure a steady job to show reliable income.
- Pay down debt to improve your DTI ratio.
- Save up for the down payment and closing costs.
- Speak with a lender early to give yourself more time to improve your financial situation.
Before applying for an FHA loan, take time to determine how much you can afford using tools such as mortgage calculators. Factors including your income, credit rating, current expenses and down payment can affect your interest rate and the loan’s affordability. With this information in mind, it’ll be easier to shop for lenders that meet your needs.
You can find an FHA lender in your area using HUD’s search tool. Be sure to get information from several lenders so you can shop for the best offer. Even if one lender disqualifies you based on your credit score or another factor, another may be willing to work with you, especially if you have other mitigating circumstances.
Your chosen lender will walk you through the application process. Be prepared to provide documents including:
- Pay stubs
- Bank statements
- W-2 forms from the past two years
- Previous tax returns
A FHA loan is a mortgage issued by a private, FHA-approved lender and insured by the Federal Housing Administration, a government agency within the Department of Housing and Urban Development. Loans are available with 15- or 30-year terms, and it’s possible to get a loan with a fixed or adjustable rate. Eligible borrowers can get traditional mortgages for primary residences, Energy Efficient Mortgages, home equity conversion mortgages, 203(k) improvement mortgages or Section 245(a) mortgages, which have payments that increase over time. There are also options to refinance FHA loans.
All FHA loans are assumable, generally, with some restrictions. A loan assumption occurs when an existing mortgage is taken over – or assumed – by the new purchaser of a property. If you buy a property with an FHA mortgage, the seller may be able to transfer the title and mortgage to you instead of you needing to get a new mortgage.
Assuming an existing mortgage can be more cost effective, especially if the existing mortgage has a lower interest rate than the current market rate. However, the lender must approve the transfer and the buyer generally still has to meet certain financial requirements to assume an FHA loan.
It’s possible to refinance an FHA loan, and there are several options for doing so:
- FHA streamline refinances. These enable you to refinance an existing FHA mortgage with limited documentation and underwriting.
- FHA simple refinances. These replace your existing FHA loan with a new FHA loan with a fixed or adjustable interest rate. You cannot take cash out with this kind of refinance.
- FHA cash-out refinances. With an FHA cash-out refinance, you take out a new loan for more than you owe on your current loan, pay off your original mortgage and then keep the difference.
- FHA 203(k) refinances. These are also known as rehab loans, and they combine renovation and repair costs into a single loan.
- Conventional refinances. You can convert your FHA loan into a conventional loan by refinancing. This new loan will not be backed by the FHA, but it can eliminate your mortgage insurance if you have at least 20% equity in the home.
