Compare Current FHA Loan Rates

Current Mortgage Rate Trends

Mortgage rates often move in line with the 10-year Treasury yield, which reacts to investor expectations about inflation, interest rate policy and the broader economy.

Concerns about inflation can create uncertainty and push investors to demand higher yields. Mortgage rates have remained elevated in recent years, and they're unlikely to drop significantly until there's more economic stability. Annual percentage rate (APR) includes the interest rate plus any fees or additional costs the lender charges.

^*Source: Curinos LLC, July 2025; assumes a 720 FICO^® Score^Θ, $350,000 mortgage
^**Source: Optimal Blue via FRED, July 2025
Notes: Rates can vary by data source; monthly payment calculation uses APR and assumes a $350,000 mortgage and 20% down

Learn more: Housing Market Predictions: What to Expect This Year

Mortgage Rate Trends for the Last 5 Years

Mortgage interest rates dropped to record lows during the pandemic as the Federal Reserve took action to stabilize the housing market. That changed in 2022 when the Fed began raising the federal funds rate to combat rising inflation.

Although mortgage rates don't move in lockstep with the Fed's rate, they're heavily shaped by expectations around Fed policy, which affects the 10-year Treasury yield. Since peaking in October 2023, rates have mostly held steady due to ongoing economic uncertainty.

Here's a look at how the average interest rate for a conventional 30-year fixed-rate mortgage has changed over the past five years.

30-Year Mortgage Rate Trends 2020 to 2025

What Affects FHA Loan Rates?

For the most part, FHA loan interest rates are subject to the same influences as conventional loan rates.

However, FHA loans are backed by the Federal Housing Administration and, therefore, less risky for lenders. As a result, they may offer lower interest rates, particularly for people with lower credit scores and down payments.

Here are some other factors that can affect the rate you receive:

• Market conditions: Broader economic trends, including inflation, investor confidence and Federal Reserve policies, influence the mortgage rates lenders offer across all loan types, including FHA loans.
• Credit score: While FHA loans allow for lower credit scores, borrowers with higher credit scores typically qualify for better interest rates since they represent less risk to lenders.
• Debt-to-income ratio: A higher debt-to-income ratio (DTI), or how much of your monthly income goes toward paying debts, can indicate financial overextension; this may lead lenders to offer higher interest rates to offset the increased risk.
• Loan amount: Larger loan amounts may come with slightly higher rates because they increase the lender's exposure if the borrower defaults.
• Repayment term: Shorter terms tend to have lower interest rates than longer terms since lenders are repaid more quickly and face less risk of default.
• Loan purpose: Whether you're buying a home, refinancing or taking cash out of your home, the type of loan you choose can impact your rate. For example, FHA cash-out refinances may carry higher rates due to increased risk.

Learn more: What Credit Score Do I Need to Buy a House?

FHA Loan Requirements

To qualify for an FHA loan, you'll need to meet financial, credit and property-related criteria set by both the FHA and your lender. While some requirements may vary by lender, here are the most common ones to expect:

• Credit score: FHA loans require a minimum credit score of 580 to qualify for the minimum down payment option. However, with a down payment of 10% or more, you may be eligible with a score as low as 500.
• DTI: Most lenders prefer a DTI below 43%, though higher ratios may be allowed with strong compensating factors like additional cash reserves or high credit scores. The maximum DTI for an FHA loan is 57%.
• Income and employment: Lenders like to see a history of steady employment, so you may need to provide at least two years' worth of income through tax returns, recent pay stubs, W-2s, bank statements and other financial documents.
• Down payment: FHA loans require a minimum down payment of 3.5% if your credit score is 580 or higher. If your score is between 500 and 579, the minimum down payment is 10%.
• Occupancy: FHA loans are only available for primary residences. You must move into the home within 60 days of closing and live there for at least one year.
• Eligible property types: You can use an FHA loan to buy or refinance a one- to four-unit home, condo, townhome, manufactured home and certain fixer-uppers through the FHA 203(k) program. The property must meet minimum FHA safety and livability standards, which are confirmed through an FHA appraisal.

Learn more: How to Qualify for an FHA Loan

Pros and Cons of an FHA Loan

As with any type of mortgage loan, FHA loans come with both advantages and disadvantages to consider. Here's what to keep in mind as you evaluate your situation and options.

Learn more: FHA vs. Conventional Loans: What's the Difference?

Should You Get an FHA Loan?

There are several situations where getting an FHA loan could make sense, including the following scenarios:

• Your credit score is below 620, and you're having trouble qualifying for a conventional loan.
• You have limited savings and need a low down payment option.
• You're a first-time homebuyer and want flexible qualification criteria.
• Your DTI is high, but you still have reliable income.
• You're buying a modest primary residence and don't need a high loan amount.

On the other hand, an FHA loan might not make sense if:

• You have strong credit and can qualify for a conventional loan without mortgage insurance.
• You're buying a second home or investment property, which FHA loans don't allow.
• You want to avoid paying mortgage insurance premiums for the life of the loan.
• You're purchasing a fixer-upper that doesn't meet FHA property standards.
• You need a loan amount that exceeds FHA limits in your area.

Before you apply for an FHA loan, be sure to research and compare different types of mortgage loans, such as conventional loans, VA loans and USDA loans, to determine which one is best suited for you.

How to Get the Best FHA Loan Rate

While FHA loans are designed to be accessible, taking a few extra steps can help you qualify for the most competitive rate possible:

• Improve your credit score. Even though FHA loans allow for lower scores, a higher score can still help you secure better interest rates. Check your credit report and FICO^® Score to evaluate your standing and determine where you can improve your credit score.
• Compare offers from multiple lenders. FHA loan rates and fees can vary from lender to lender, so it's worth shopping around to find the best overall deal.
• Make a larger down payment. FHA loans require as little as 3.5% down, but contributing more upfront reduces the lender's risk and may result in a lower rate.
• Keep your DTI low. A lower DTI shows that your finances are under control, improving your chances of getting a better rate.

The Bottom Line

FHA loans can be a solid option if you're struggling to qualify for a conventional mortgage. With lower credit score and down payment requirements, they open the door to homeownership for many buyers.

That said, they also come with limits, including required mortgage insurance and property restrictions. As you weigh your options, consider how long you plan to stay in the home, your financial situation and what loan types you're eligible for.

Before you apply, take time to compare lenders, review loan terms and check your credit. Your credit score plays a big role in the rate you receive, so it's smart to keep tabs on your progress. You can monitor your credit for free with Experian, making it easier for you to spot opportunities to improve and qualify for a better deal. The more prepared you are, the better your chances of landing a loan that fits your goals.