Current FHA Loan Rates: Compare, Calculate, and Decide

Few numbers in homebuying matter as much as the FHA loan rate — and few are as easy to misinterpret. As of late June 2026, Bankrate (financial data aggregator) reports the national average for a 30-year FHA fixed rate sits at 6.30% — roughly a quarter-point below the equivalent conventional loan.

Current average FHA 30-year fixed rate: 6.30% (as of June 30, 2026, Bankrate) ·
Minimum down payment: 3.5% ·
Minimum credit score: 580 ·
Maximum loan limit for 2025 (single-family): $524,225 (high-cost areas up to $1,209,750) ·
Annual MIP (with <10% down): 0.55% of loan balance

Key metrics at a glance:

What are interest rates for FHA right now?

On June 29–30, 2026, Bankrate recorded the national average 30-year FHA purchase mortgage interest rate at 6.30%, with an APR of 6.34%. That same day, conventional 30-year fixed rates averaged 6.54% interest and 6.61% APR — confirming a persistent FHA discount of roughly 0.24 percentage points.

What is a 30-year FHA loan?

• A home loan insured by the Federal Housing Administration, repaid over 30 years at a fixed interest rate.
• Borrowers pay mortgage insurance premiums (MIP) — 1.75% upfront and an annual fee of 0.55% for most with <10% down.
• Available for single-family homes, condos, and select multi-unit properties.

What is a 30-year FHA fixed-rate?

• The interest rate stays the same for the entire 30-year term, so monthly principal + interest never changes.
• Rate is determined by market conditions, loan size, and credit profile; Reach Home Loans (lender educator) says FHA rates are roughly 0.125–0.25 percentage points below conventional for borrowers with average credit (620–680).
• The 30-year term is the most common FHA product, chosen for its lower monthly payment compared to 15- or 20-year terms.

Do FHA loans have higher interest rates?

No — FHA loans typically carry lower interest rates than conventional loans for borrowers with similar credit profiles. The trade-off: FHA’s mortgage insurance premiums add a fixed cost that can offset the rate advantage. Bankrate’s June 2026 data shows FHA at 6.30% versus conventional at 6.54% — a 24-basis-point gap. But the all-in APR including MIP closes that gap considerably.

What are the pros and cons of FHA vs conventional mortgages?

Three key differences, one pattern: FHA offers easier entry but carries mandatory insurance that never drops off unless you refinance to a conventional loan or put down ≥10%.

What is a downside to an FHA loan?

The single biggest drawback: mandatory mortgage insurance that typically lasts the entire loan if the down payment is under 10%. That annual MIP — 0.55% of the balance for most 30-year loans with <10% down — never drops off the way PMI on a conventional loan does once you hit 78% LTV.

Why would you not get an FHA loan?

• Lifetime MIP: Bankrate’s MIP guide explains that for 30-year loans with LTV above 90%, annual MIP is paid for the entire loan term. Only refinancing into a conventional product removes it.
• Stricter property appraisal: The FHA’s minimum property standards require a complete inspection of safety, structural soundness, and value — properties needing major repairs may not qualify.
• Loan limits cap amount: In 2025 the floor for a single-family FHA loan is $524,225 (AmeriSave); while high-cost areas reach $1,209,750, that ceiling still limits buyers in very expensive markets.
• Upfront MIP adds closing costs: 1.75% of the loan amount must be paid at closing (or financed), meaning an extra $5,250 on a $300,000 loan.

The pattern: FHA’s lower headline rate often hides a monthly insurance premium that makes the total payment higher than a conventional loan with PMI — especially for borrowers with good credit who could qualify for a conventional product with a low down payment.

What is the monthly payment on a $400,000 loan at 7%?

On a 30-year fixed loan at 7% interest, the monthly principal and interest payment for a $400,000 loan is approximately $2,661. That’s the base — you’ll also add MIP (if FHA) or PMI, plus property taxes and homeowners insurance.

What are the monthly payments on a $300,000 30 years at 7%?

• Principal + interest: approx $1,996 per month
• FHA annual MIP (0.55%): adds ~$138/month for the full loan term
• Property taxes (est. 1.2% annually): ~$300/month
• Homeowners insurance: ~$100/month
• Total estimated monthly payment (FHA): ~$2,534

How to use an FHA loan rates calculator

1. Enter the loan amount (e.g., $300,000).
2. Input the interest rate you qualify for (use current average of 6.30% from Bankrate as your baseline).
3. Add 1.75% upfront MIP (financed or paid at closing).
4. Include annual MIP (0.55% for <10% down).
5. Factor in local property taxes and insurance.

The implication: MIP can significantly inflate the true monthly cost beyond the base rate.

Can you put 20% down on an FHA loan?

Yes — you can put any amount down up to 20% or more. But doing so removes the main advantage of an FHA loan: the low 3.5% minimum down payment. Putting 20% down on an FHA loan still requires MIP for loans with less than 10% down? Actually, if down payment ≥10%, MIP is shorter but still exists. Only if you refinance to a conventional loan does 20% equity eliminate mortgage insurance.

What is the minimum down payment for an FHA loan?

• 3.5% for borrowers with credit scores of 580 or higher (Rocket Mortgage)
• 10% for borrowers with scores between 500 and 579 (Rocket Mortgage)
• Down payment can come from a gift, a grant, or a down payment assistance program — no seasoning required for gifts.

The pattern: putting 20% down on an FHA loan makes little financial sense for most borrowers.

How do FHA interest rates vary by credit score?

Unlike conventional loans, which swing dramatically with credit score changes, FHA rate sheets are relatively flat. Reach Home Loans notes that borrowers with scores from 580 to 720 may receive similar base FHA rates — the spread is typically only 0.25–0.5 percentage points across the entire eligible range.

What is the FHA interest rate with a 740 credit score?

• Borrowers with scores ≥740 generally get the best FHA rates, roughly 0.25–0.5% lower than those at the 580 threshold.
• At 740, you’d likely see rates near the national average of 6.30% (or slightly below), compared to perhaps 6.55–6.80% for a 580-score borrower.

What are FHA loan rates in California?

• California rates tend to be slightly above the national average due to higher loan limits and larger average loan sizes.
• County-level loan limits vary widely — from $524,225 in standard areas to over $1 million in high-cost counties like San Francisco or Los Angeles (HUD loan limit lookup tool).
• Higher loan amounts often trigger a higher annual MIP tier (0.70% instead of 0.55%) when the loan exceeds $524,225.

Steps to Get the Best FHA Loan Rate

Follow this sequence to maximize your chances of locking the lowest possible rate:

1. Check your credit score — If below 580, aim to raise it before applying. Even moving from 580 to 620 can improve rate offers.
2. Save for a down payment of at least 10% — This reduces the MIP period to 11 years (vs. lifetime) and may lower your annual MIP rate.
3. Shop multiple FHA-approved lenders — Bankrate recommends getting quotes from at least three lenders because origination fees and rate sheets differ.
4. Compare the APR, not just the interest rate — APR includes points, MIP, and lender fees.
5. Lock your rate when you see a favorable trend — Forbes Advisor notes that forecasts suggest rates may decline, but timing the market is risky.
6. Consider an FHA streamline refinance later — If rates drop significantly in a few years, you can refinance without a full appraisal or income re-verification.

The takeaway: shopping around and improving credit can save thousands.

Timeline: How FHA Rates Have Moved

• November 26, 2024 — HUD (federal housing regulator) announced 2025 FHA loan limit increases, with the HECM ceiling rising to $1,209,750 (HUD).
• Late August 2025 — Norada Real Estate (real estate research firm) recorded the average FHA 30-year rate at 6.45% (APR 6.51%) (Norada Real Estate).
• June 30, 2026 — Bankrate reports the average at 6.30% — 0.24 points below conventional (Bankrate).

The pattern: FHA rates have roughly tracked conventional rates but have maintained a consistent spread of 0.2–0.5 percentage points lower. The key variable is not the direction but the margin — and that margin tends to widen when credit is tight.

Clarity: What’s Confirmed and What’s Not

Confirmed facts

• FHA loans require mortgage insurance for the life of the loan if down payment <10% (Bankrate MIP guide)
• Minimum down payment is 3.5% with credit score ≥580 (Rocket Mortgage)
• FHA rates are generally 0.125–0.25 percentage points lower than comparable conventional rates (Reach Home Loans)
• Upfront MIP of 1.75% is mandatory for all FHA loans (AmeriSave)

What’s unclear

• Whether FHA or conventional is cheaper overall depends on loan term, credit score, and how long you keep the mortgage
• Future rate movement is uncertain and depends on economic conditions, with Forbes Advisor citing analyst forecasts ranging from 5.8% to 6.5% through 2026

The uncertainty: future rate movements and overall cost comparison depend on individual circumstances.

Expert Perspectives

“A borrower is not eligible for FHA-insured financing if the minimum decision credit score (MDCS) is below 500.”

— U.S. Department of Housing and Urban Development (HUD) (federal housing regulator)

“FHA interest rates tend to be roughly 0.125% to 0.25% lower than conventional rates for borrowers with average credit scores (620–680), because FHA pricing is less credit-sensitive.”

— Reach Home Loans (lender educator)

“Mortgage rates generally stayed in the upper-6% range through much of 2025 and … forecasts from Fannie Mae, Freddie Mac, and other housing economists expect 30-year fixed rates to gradually ease, potentially dropping below 6% by end-2025.”

— Forbes Advisor (financial news outlet)

Summary

FHA loan rates today sit at 6.30% — a genuine discount to conventional products — but the headline number is only half the story. The mandatory MIP structure means a buyer with a 580 credit score and 3.5% down will pay roughly 0.55% of the loan balance each year for the entire 30-year term. For the borrower who lacks a 20% down payment or has credit below 660, FHA is likely the best path. For the borrower with a 740 credit score and a 20% down payment, the choice is clear: skip FHA and go conventional to avoid the insurance trap.

While FHA loans remain popular for low down payments, borrowers with military service may find better value by comparing today’s VA home loan rates and their unique benefits.

Frequently asked questions