FHA loan rates

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 October 2023. For most of early 2024, FHA mortgage rates have hovered around 7 percent. 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.

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.

FHA loan requirements

• FHA loan limits: $498,257 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

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 2024, the national ceiling is $498,257 for a single-family home, and up to $1,149,825 in high-cost areas.

Should you get an FHA loan?

FHA loans are aimed at certain types of borrowers. Some ways to know if this option is for you include:

• 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

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

1. 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.
2. Improve your debt-to-income (DTI) ratio. Generally, the lower your DTI ratio, the better your rate.
3. 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.

Additional FHA loan resources

• FHA loans resource page
• How to find the best FHA lenders
• FHA refinance rates

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.

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Edited by: Laurie Dupnock, Editor, Home Lending

I’ve spent five years in writing and editing roles, and I now focus on mortgage, mortgage relief, homebuying and mortgage refinancing topics. I’m most interested in providing resources for aspiring first-time homeowners to help demystify the homebuying process. In 2021, I earned a Poynter ACES Certificate in Editing. I have an MA in English. 

Read more from Laurie Dupnock