FHA loans are government-backed mortgages for single-family and multifamily homes. They’re offered through FHA-approved lenders and insured through the Federal Housing Administration (FHA).

What are the different types of FHA loans?

The FHA offers a variety of loan programs tailored to different situations, including: Basic home mortgage loan 203(b): A standard mortgage loan insured by HUD. Borrower must meet credit requirements and must purchase a one-to-four unit structure with a price below the area’s mortgage limit. Up to 96.5 percent financing available. FHA adjustable-rate mortgages (ARMs): Unlike fixed-rate mortgages that have the same interest rate for the life of the loan, adjustable-rate mortgages will start out with a lower interest rate for a certain amount of time, and will then adjust up or down once that period expires. The rate will then change on a regular basis, typically once a year. You might consider an ARM if you plan to sell the home before the rate adjusts, or if you expect that your income will increase to compensate for potentially higher payments. Otherwise, the risk of a significantly higher payment down the road is not to be taken lightly. 203(k) loan, aka rehabilitation mortgage: You can use this loan to finance up to $35,000 into your mortgage to repair, upgrade or improve a single-family home. Home equity conversion mortgage for seniors: You can use this reverse-mortgage program to withdraw a portion of your home’s equity to receive as income. FHA streamline refinance: A refinance option that requires minimal borrower credit documentation and underwriting.

How much does an FHA loan cost?

FHA loans offer a ton of flexibility, but there is a downside — FHA closing costs are steep, and the mortgage insurance premium is the main culprit. As a borrower, you'll need to come up with 1.75 percent of the loan amount at closing. For example, on a $300,000 loan, that’s $5,250.

FHA loan rates | Bankrate | Compare rates today

Weekly national mortgage interest rate trends

Current mortgage rates

30 year fixed FHA

6.77%

Today's national FHA mortgage interest rate trends

For today, Monday, December 23, 2024, the national average 30-year FHA mortgage interest rate is 6.89%, up compared to last week’s rate of 6.76%. The national average 30-year FHA refinance interest rate is 6.88%, down compared to last week’s rate of 6.90%.

We’ve determined the national averages for mortgage and refinance interest rates from our most recent survey of the nation’s largest mortgage lenders. Our own mortgage and refinance interest rates are calculated at the close of the business day, and include annual percentage rates and/or annual percentage yields. The interest rate averages tend to be volatile, and are intended to help consumers identify day-to-day movement.

Current FHA loan rates

Since the pandemic, rates on FHA loans have bounced around — from less than 3 percent during the pandemic to 8 percent in 2023 to closer to 6 percent as of September 2024. The table below brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive FHA loan rates. This interest rate table is updated daily to give you the most current rates when choosing an FHA mortgage home loan.

Product	Interest Rate	APR
30-Year FHA Rate	6.89%	6.93%
30-Year Fixed Rate	6.93%	6.98%
15-Year Fixed Rate	6.20%	6.27%
5/1 ARM Rate	6.45%	6.45%
30-Year VA Rate	6.75%	6.79%

Rates as of Monday, December 23, 2024 at 6:30 AM

Product	Interest Rate	APR
30-Year FHA Rate	6.88%	6.92%
30-Year Fixed Rate	6.96%	7.00%
15-Year Fixed Rate	6.22%	6.29%
5/1 ARM Rate	6.34%	6.34%
30-Year VA Rate	6.74%	6.78%

Rates as of Monday, December 23, 2024 at 6:30 AM

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

For Bankrate’s overnight averages, APRs and rates are based on no existing relationship or automatic payments. To determine the Bankrate Monitor mortgage rate averages, Bankrate collects APRs and rates from the 10 largest banks and thrifts in 10 large U.S. markets based on no existing relationship or automatic payments.

Our advertisers are leaders in the marketplace, and they compensate us in exchange for placement of their products or services when you click on certain links posted on our site. This allows us to bring you, at no charge, quality content, competitive rates and useful tools.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

FHA loans vs. conventional loans

FHA loans can have lower interest rates than conventional loans, but they also have higher upfront costs. How do FHA loans compare to 30-year fixed mortgages? See the table below for an example of the costs associated with an FHA loan versus a 30-year fixed loan. Keep in mind that interest rates are dependent on the market and the borrower's creditworthiness.

	30-year fixed FHA loan	30-year fixed conventional loan
*Note: These mortgage interest rates are as of Sept. 20, 2024. The figures do not account for homeowners insurance, property taxes or other costs that might be included with your monthly mortgage payment. The FHA loan amount includes a 1.75% upfront mortgage insurance premium.
Home price	$400,000	$400,000
Down payment	3.5%	5%
Loan amount*	$392,755	$380,000
Interest rate	6.12%	6.21%
Monthly mortgage payment (principal and interest)	$2,385	$2,330
Monthly mortgage insurance payment	$112	$120
Total monthly mortgage payment (includes principal, interest and mortgage insurance)	$2,497	$2,450
Total interest over life of loan	$465,899	$458,745
Total mortgage insurance over life of loan	$40,442	$15,884
Total over life of loan (includes principal, interest and mortgage insurance)	$899,096	$854,629

If you qualify for both a conventional and FHA loan, which should you choose?

Jeff Ostrowski

Principal writer, Home lending

If you qualify for both, I’d almost certainly go for the conventional loan. FHA’s hefty mortgage insurance (MIP) includes 1.75 percent of the loan amount upfront, plus monthly premiums. FHA loans are a great option for borrowers with sub-700 credit scores and not a lot of cash for a down payment, but the downside is the MIP, which FHA charges because of the higher risk factor. If you can get a conventional loan, you’ll find that the private mortgage insurance (PMI) costs less and is easier to get rid of once your loan-to-value (LTV) ratio hits 80 percent. For borrowers who don’t qualify for a conventional loan, the smart move is to take the FHA loan, then refi into a conventional loan once your credit improves and the LTV ratio looks better.

FHA loan requirements

FHA loan limits: $524,225 for a single-family home; higher in costlier counties and for multifamily homes
Minimum credit score: 580 with a 3.5% down payment, or 500 with a 10% down payment
Maximum debt-to-income (DTI) ratio: Up to 50%
Mortgage insurance premiums (MIP): 1.75% of your loan principal upfront; monthly premiums thereafter based on amount you borrow, down payment and loan term and type
Financial and work history: Proof of consistent employment and income

Learn more: FHA loan requirements

FHA mortgage insurance

FHA loans require borrowers who put down less than 20 percent to pay mortgage insurance premiums (MIP). Mortgage insurance costs add a meaningful amount to your monthly payment, so keep these costs in mind when you’re budgeting for a home.

There are two types of premiums: the upfront mortgage insurance premium (1.75 percent of the base loan amount) and an annual mortgage insurance premium (0.15 percent to 0.75 percent, depending on the loan term, loan amount and the loan-to-value (LTV) ratio). The annual premium is owed for the loan’s lifetime if your down payment is less than 10 percent; if you put down at least 10 percent, however, the premiums can be removed after 11 years.

FHA loan limits

Each year, the FHA updates its lending limits or the maximum amount the agency will insure for a given area and property type. These limits are influenced by mortgage market-makers Fannie Mae and Freddie Mac’s conforming loan limits. For 2025, the national ceiling is $524,225 for a single-family home, and up to $1,209,750 in high-cost areas.

Should you get an FHA loan?

FHA loans are aimed at certain types of borrowers. You might want to consider an FHA loan if:

Your credit score is below 700 (but above 580)
You have limited down payment savings (but enough to pay 3.5 percent, plus closing costs)
You don’t mind the tradeoff of higher mortgage insurance premiums for looser underwriting criteria
You’re a first-time buyer

Here’s an overview of the general pros and cons:

Pros of FHA loans

Low down payment requirement
Friendly to first-time homebuyers (includes those who have not owned a home for at least three years)
Financing for mobile homes and factory-built homes
May accommodate people who own the land where the home will be located and those who live in a mobile home park
Can lock in a low rate without a large down payment

Cons of FHA loans

Borrower required to pay two types of mortgage insurance: an upfront mortgage insurance premium (MIP) and an annual premium
Require that the house meet certain standards, which decreases buying options

How to get the best FHA loan rate

While FHA loan rates can sometimes be lower than the rates on other types of mortgages, there are still ways to ensure you get the lowest possible rate for your situation. These include:

Work on your credit score. For the most competitive FHA rate, you’ll need good to excellent credit, though you can still qualify with a score as low as 580.
Improve your debt-to-income (DTI) ratio. Generally, the lower your DTI ratio, the better your rate.
Shop around and compare multiple offers. This step can save you thousands of dollars over the life of the loan. Consider the interest rate as well as the annual percentage rate (APR). The latter accounts for the lender’s fees. Be sure to read customer reviews on lenders as well for additional insight.

Learn more: How to get the best mortgage rate

FHA loan FAQ

FHA loans are government-backed mortgages for single-family and multifamily homes. They’re offered through FHA-approved lenders and insured through the Federal Housing Administration (FHA).
The FHA offers a variety of loan programs tailored to different situations, including:
- Basic home mortgage loan 203(b): A standard mortgage loan insured by HUD. Borrower must meet credit requirements and must purchase a one-to-four unit structure with a price below the area’s mortgage limit. Up to 96.5 percent financing available.
- FHA adjustable-rate mortgages (ARMs): Unlike fixed-rate mortgages that have the same interest rate for the life of the loan, adjustable-rate mortgages will start out with a lower interest rate for a certain amount of time, and will then adjust up or down once that period expires. The rate will then change on a regular basis, typically once a year. You might consider an ARM if you plan to sell the home before the rate adjusts, or if you expect that your income will increase to compensate for potentially higher payments. Otherwise, the risk of a significantly higher payment down the road is not to be taken lightly.
- 203(k) loan, aka rehabilitation mortgage: You can use this loan to finance up to $35,000 into your mortgage to repair, upgrade or improve a single-family home.
- Home equity conversion mortgage for seniors: You can use this reverse-mortgage program to withdraw a portion of your home’s equity to receive as income.
- FHA streamline refinance: A refinance option that requires minimal borrower credit documentation and underwriting.
FHA loans offer a ton of flexibility, but there is a downside — FHA closing costs are steep, and the mortgage insurance premium is the main culprit. As a borrower, you'll need to come up with 1.75 percent of the loan amount at closing. For example, on a $300,000 loan, that’s $5,250.

Additional FHA loan resources

Meet our Bankrate experts

Written by: Jeff Ostrowski, Principal Reporter, Mortgages

I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.

FHA loan rates