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FHA Loan Rates for March 25, 2019


Current FHA Mortgage Rate

Current FHA rates average 4.91% nationally, and have changed by +0.40% over the past twelve months. This is not an APR and does not factor in any closing costs or fees.

Current FHA Loan Rates Online

The biggest advantages to FHA loans are the reduced down payment and credit requirements. The monthly payments in the chart above assume a down payment of 3.5%, which requires a credit score of at least 580. However, borrowers with credit scores of as low as 500 can qualify for an FHA loan, provided they put down at least 10% of their home's value upfront. If you're a veteran, you may be able to obtain even more lucrative terms through a VA loan.

FHA loans usually feature comparable or lower interest rates than conventional mortgages, but borrowers will find the long-term costs on FHA loans to be greater due to the presence of private mortgage insurance (PMI). Lenders are willing to underwrite FHA loans to borrowers with poor credit due to the insurance protection offered by PMI, which covers their losses in the event that the homeowner defaults.

Borrowers should be aware that they will be responsible for PMI premiums for as long as their FHA loan remains outstanding. However, most borrowers can remove PMI by refinancing into a conventional mortgage once they've had some time to build up their equity and credit profile. If you're a first time homebuyer, Fannie Mae's HomeReady and Freddie Mac's HomePossible also offer similar terms to FHA loans, but allow you to stop paying PMI once you've achieved at least 22% equity in your home.

Online lenders, credit unions and national banks all offer FHA loans, but the quotes will vary depending on the lender you contact.

FHA Mortgage Rate Forecast: Rising Rates, Faster Closings and Improving Credit Scores

As interest rates continue to rise, FHA loan rates also rose by as much as 0.6% over the past year. Average closing times for both FHA purchase and refinance loans have declined by two days over the past year, reflecting a faster closing process, while new FHA issues have shifted in favor of purchase mortgages over refinances.

Graph of average 30-year mortgage rates from 2008 to 2018

The Federal Reserve continues to raise rates in response to improving economic indicators. While current interest rates reflect an upward trend, they still remain at historically low levels. Mortgage interest rates are a direct factor of the target rate set by the Federal Reserve and are likely to increase with every rate hike initiated by the Fed Board of Governors. Home buyers considering an FHA loan may want to apply for one soon, as borrowing costs are likely to continue to increase over time.

Recent FHA Loan Rates

Comparing August's average 30- year FHA rate of 4.95% to January's average FHA rate of 4.36%, borrowers will find a difference of $30,718 in interest costs over the life of the loan, assuming a 3.5% down payment on a home purchase of $250,000.

Avg FHA Loan RateAvg 30-Yr Mortgage RateDifference (basis points)

Interest rates on FHA mortgages have largely mirrored the performance of conventional mortgage loans over time. Over the past eight months, FHA interest rates have maintained a spread of 1–4 basis points versus comparable conventional mortgages. Despite the close proximity of rates, FHA borrowers will still pay more in the long run due to the presence of PMI, which can cost anywhere between 0.5% to 5% of the original loan amount per year.

Shortened FHA Loan Closing Times

The average time to close on an FHA loan decreased relative to early 2018. As of August 2018, it takes an average of 44 days to close on an FHA loan, which is three days less than the January average of 47 days. This could reflect a more efficient underwriting process or greater capacity to originate new FHA mortgages.

National average FHA closing times in days, Ellie Mae

Fewer Refinancings

Generally, FHA loan holders are more likely to refinance into conventional mortgage loans rather than FHA loans to eliminate the need for PMI payments. Rising interest rates have made refinancing a less attractive prospect for almost all existing homeowners. As a result, we've seen borrowers shift away from refinancing; home purchases now make up roughly 78% of all new FHA loan originations as of August 2018. That proportion will likely continue to increase as a result of rising interest rates.

Interest Rates at Top-Rated FHA Lenders

FHA loan applications involve a number of steps that aren't required in a conventional mortgage application, which makes it important to find an experienced FHA lender. The mortgage companies below originated the plurality of FHA loans in 2018, which makes them an excellent choice for borrowers who seek reputable mortgage lenders.

Best FHA Lenders in 2018

Average Loan Amount 201830-Year FHA Loan Rate
Quicken Loans$164,6554.50%
Wells Fargo$166,1365.00%
Bank of America$189,9544.63%
Chase Bank$149,5694.88%
Purchase FHA loan rates as advertised by lender websites. Underlying assumptions vary

The average loan amount comprises the average of all FHA loans issued by each lender in 2018. Loan amounts were tallied on a national basis and include all residential mortgages issued between January and August of 2018. Both home purchases and refinances were counted in the data set. The interest rates cited are not APRs and do not reflect the impact of any closing costs, points or monthly insurance payments that home buyers will be responsible for.

The mortgage rates above may change frequently and rely on purchase cost, down payment and credit score assumptions made for a hypothetical FHA application. The lenders listed above are the largest issuers of FHA loans by volume. In addition to FHA loans, all lenders cited also offer other mortgage products like conventional mortgages and VA loans, making them excellent choices for borrowers cross-shopping mortgage products.

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