Compare today’s FHA refinance rates | Bankrate (2024)

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FHA refinance rates today

Rates on FHA loans have moved around a lot in recent years — from less than 3 percent during the pandemic to 8 percent in October 2023. For most of early 2024, FHA mortgage rates have been near 7 percent. The table below brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive FHA refinance rates. This interest rate table is updated daily to give you the most current rates when choosing an FHA refinance home loan.

Types of FHA refinance loans

There are a few ways to refinance an FHA loan:

• Rate-and-term or simple FHA refinance: Refinancing an FHA loan to adjust the interest rate or term or both with no cash out
• FHA cash-out refinance: Refinancing an FHA loan to adjust the interest rate or term or both with cash out
• FHA streamline refinance: Refinancing an FHA loan to adjust the interest rate or term or both without an appraisal, credit check or income verification
• 203(k) loan or rehabilitation mortgage: Financing up to $35,000 into your mortgage to repair, upgrade or improve a single-family home

Should you refinance your FHA loan?

A key consideration when deciding whether to refinance a mortgage is when you’ll break even on your costs. The break-even point is calculated by adding up all refinancing closing costs and figuring out how many years it will take you to make up those costs with the savings from your new mortgage payment compared to your previous one. Refinancing makes more sense if you plan to stay in your home longer than the break-even point, otherwise, you could potentially lose money.

Another important factor is how long you plan to stay in your home. Refinancing if you expect to move in a few years doesn’t always make financial sense even if you get a lower interest rate, because you may not have enough time to break even on closing costs. Most experts say you’ll want to be in your house at least two to five years after refinancing, but you should do your own break-even calculation to figure out what makes the most sense for you.

Pros of FHA refinancing

• Potential to lower your interest rate and reduce your monthly loan payment
• Open to those with credit scores as low as 580
• Streamline refinances available with no credit check or income verification
• Cash-out refinance can provide you with funds needed for expenses like renovations

Cons of FHA refinancing

• Can’t take out more than FHA loan limits
• Mortgage insurance requirements
• Closing costs

How to get the best FHA refinance rate

1. Work on your credit score. For the most competitive FHA refinance 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. When you’re refinancing, lower fees help you break-even sooner.

Learn more:How to get the best refinance rate

Additional FHA resources

• FHA vs. conventional loans
• FHA loans resource page
• How to find the best FHA lenders
• The latest FHA loan limits

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