FHA loan rates still have the lowest average rates among major mortgage types, but the gap has widened rather than narrowed this year. Here, we look at what FHA rates really are today, why they’re changing the way they are, and what the leading forecasts expect through 2027.
FHA Mortgage Rates Today
The average 30-year fixed-rate FHA loan rate is 6.068%, according to Fortune’s Daily Mortgage Rate Tracker, down slightly from 6.09% the previous day. By comparison, the average 30-year conventional loan rate for the week ending Aug 20, 2026, was 6.65%, according to Freddie Mac’s Weekly Mortgage Market Report. That’s a nearly 60 basis point spread now, up from the roughly 30 basis point spread FHA borrowers typically saw a year or two ago.
Rates on any given day depend heavily on your lender, credit history and loan amount, so consider these figures national averages, not a definitive suggested rate. Rate volatility has been high throughout the year, partly due to ongoing energy price pressures related to developments in the Middle East. So don’t be surprised if this number changes significantly from week to week.
FHA rates are consistently lower than 30-year conventional mortgages and jumbo loans, which is exactly why they remain a top option for buyers with limited credit history or who can afford a smaller down payment. But the important point to make is that interest rates alone don’t reflect the full true cost of the loan.
FHA Mortgage Rates Compared to Conventional Loan Rates
The lower stated rate is real, but mandatory FHA mortgage insurance changes the equation. A conventional loan with a 20% down payment doesn’t have mortgage insurance at all. But an FHA loan, regardless of how much you put down, is covered by it for the life of the loan in most cases.
The annual percentage rate (APR) reflects this better than the interest rate alone. In addition to the interest rate, the APR also takes into account lender fees, discount points, and mortgage insurance, so it’s a more honest measure of the true cost of the loan over time.
Because FHA loans require both an initial mortgage insurance premium and an annual premium, their APR is often closer to the APR of a conventional loan than the stated interest rate difference might suggest. When comparing loan offers, always compare APRs side by side, not just interest rates.
FHA Credit Score and Down Payment Requirements
The rate you’re offered depends more than anything on your financial situation. According to The Mortgage Reports, FHA loans are technically available to borrowers with credit scores as low as 500, but they require a minimum 10% down payment. If your score is below 580 and above 500, your lender options quickly narrow down, as not all FHA-approved lenders will accept this credit score range.
At a score of 580 or higher, the minimum down payment drops to the standard 3.5%; this is a major reason why FHA continues to be the default choice for many first-time homebuyers.
Your loan amount also has to fall within FHA’s county-level limits. For 2026, HUD set the nationwide floor at $541,287 and the ceiling at $1,249,125 for a single-family home, with the higher ceiling applying only in expensive metro counties. Go above your county’s limit and you’re into conventional or jumbo territory instead.
A quick real-world example: Say a public school teacher with a 620 credit score buys a 350,000 home with 3.5% down (12,250), borrowing $337,750 at 6.068%. Principal and interest run around $2,050 a month.
Add the annual mortgage insurance premium (0.55% of the loan balance, split monthly, per FHA.com’s current MIP schedule) and you’re looking at roughly $155 more a month, before taxes and homeowners insurance. That MIP doesn’t disappear at 20% equity the way conventional PMI does. Unless she put down 10% or more, she’d need to refinance out of FHA entirely to drop it after 11 years.
Loan officer’s take: borrowers fixate on the rate number and forget MIP is permanent on a low-down-payment FHA loan. If your credit is closer to 680 or 700 and you can scrape together 5% down, it’s always worth running a side-by-side conventional quote before assuming FHA is automatically cheaper.
The Best FHA Lenders Today
The right lender affects both your rate and how smooth the process is. A few consistently strong options for FHA borrowers:
NBKC Bank
NBKC Bank is known for its award-winning service and a full range of mortgage products. Its online application process, competitive rates, and dedicated support make it a solid FHA choice.
Guaranteed Rate
Guaranteed Rate is one of the nation’s largest retail lenders. Its AI-driven platform automates income verification and underwriting, which speeds up approvals and gives borrowers a transparent way to track loan status.
Rocket Mortgage
Rocket Mortgage, the largest retail mortgage lender in the US, covers adjustable, fixed-rate, and refinance products through an easy digital process.
Bethpage Federal Credit Union (BFCU)
BFCU offers competitive rates and minimal fees as a credit union, with the personalized service that comes from being member-owned rather than a large bank.
Fairway Independent Mortgage Corporation
Fairway is a strong fit for first-time buyers specifically, with fast processing times and a wide range of loan programs.
Working with a mortgage broker in the US instead of going straight to a single lender gives you access to multiple FHA-approved lenders at once, which matters more than ever with the current rate spread this wide.
FHA Mortgage Rate Forecast for 2026 and 2027
Forecasters have gotten notably more cautious over the summer. In its August Housing Forecast, Fannie Mae sharply raised its outlook, now projecting the 30-year fixed rate to average 6.7% in Q3 and 6.8% in Q4 of 2026, holding around 6.7% to 6.8% through the first half of 2027. That’s a meaningful jump from its earlier summer forecast of 6.4%.
The Mortgage Bankers Association is somewhat more optimistic but still far from a return to sub-6% territory. MBA projects the 30-year rate averaging 6.5% across 2026, 2027, and 2028, essentially flat rather than declining.
Since FHA rates tend to move in step with conventional rates, minus their typical 30 to 60 basis point discount, that points to FHA rates likely holding in the high-5% to low-6% range through 2027 rather than dropping sharply, barring a surprise shift in Fed policy or a sudden cooling in inflation.
Factors Influencing FHA Mortgage Rates
Federal Reserve Policy
The Fed has held its target rate at 3.50% to 3.75% since January 2026, and its July meeting actually saw three regional presidents dissent in favor of a rate hike rather than a cut, driven by inflation that remains elevated due to energy-related supply shocks. The Fed doesn’t set mortgage rates directly, but it shapes them through the federal funds rate and the broader money supply. Right now, the signal from the Fed leans toward rates staying higher for longer, not cuts arriving soon.
The Bond Market
Mortgage rates track mortgage-backed security yields, which move closely with the 10-year US Treasury yield. When bond prices fall, yields rise, and mortgage rates tend to follow upward. That relationship is a big part of why rates jumped earlier this year alongside geopolitical shocks.
Inflation
When inflation rises, lenders need higher interest rates to maintain their real yields, as the purchasing power of money declines more rapidly. Energy-related price pressures this year are the main reason inflation has not eased as quickly as forecasters had expected in early 2026.
Economic activity
Strong economic growth typically drives up rates, as it is often accompanied by higher spending and higher inflationary pressures. Slowing economic growth has the opposite effect, giving policymakers more time to cut rates to stimulate borrowing.
Your financial situation
Your credit score, down payment size, and the equity in your home all play a role in determining the rate you’ll be offered. Lenders offer better terms to less risky borrowers; That means that even within the standard FHA insurance structure, stronger credit and a larger down payment consistently lead to better rates.
Property Type
Primary residences tend to get better rates than second homes or investment properties because lenders view owner-occupied homes as less risky.
International Events
Global instability typically drives investors toward the safety of bonds, which can lower bond yields and thus lower mortgage rates. Conversely, events that increase energy prices or the cost of providing goods, such as the ongoing Middle East tensions this year, typically push rates higher.
