Today's FHA Refinance Rates

How FHA Refinancing Works?

FHA refinance rates can help homeowners lower monthly payments, change loan terms, or access home equity, depending on the refinance type and eligibility. Rates are displayed above and update regularly based on market conditions and borrower qualifications.

This guide explains how FHA refinancing works, what affects FHA refinance rates, what it typically costs, who may qualify, and how to choose the right FHA refinance option for your goals.

What Are FHA Refinance Rates?

FHA refinance rates are the interest rates lenders offer for a refinance into an FHA-insured mortgage.

The federal government does not set FHA interest rates. Approved lenders price FHA refinance rates based on market conditions and the borrower’s profile.

Your interest rate and Annual Percentage Rate, or APR, can differ. APR includes the interest rate plus certain loan costs, which can help you compare offers more accurately. Reviewing the Loan Estimate is one of the clearest ways to compare APR, fees, and projected payments across lenders.

What Affects FHA Refinance Rates

FHA refinance pricing is driven by a mix of market conditions and loan-level factors. Overarching economic conditions like the bond market, inflation expectations, and Federal Reserve policy all play a role in shaping your mortgage rate.

Your personal financial situaton also plays a key role. Your credit score, debt-to-income ratio, loan-to-value ratio, loan term, and other factors all play into your mortgage rate. 

Types Of FHA Refinance Loans

Most FHA refinances fall into three paths.

FHA Streamline Refinance: An FHA Streamline Refinance is for homeowners who already have an FHA loan. It is designed to reduce payment or improve loan stability with less documentation than a standard refinance in many cases. Some streamline refinances may not require an appraisal, though lender policy can vary. A streamline refinance must generally provide a clear benefit to the borrower under FHA program standards.

FHA Rate-And-Term Refinance: An FHA rate-and-term refinance replaces your current mortgage with a new FHA loan to change the interest rate, the term, or both. This option typically involves full underwriting, which may include income, assets, credit review, and an appraisal.

FHA Cash-Out Refinance: An FHA cash-out refinance replaces your current mortgage and allows you to take cash from your available equity at closing. This option typically requires full underwriting and an appraisal. FHA cash-out refinances are commonly subject to a maximum loan-to-value limit, which is often lower than other FHA refinance types.

How FHA Mortgage Insurance Affects Refinance Costs

FHA loans require mortgage insurance premiums, or MIP, which impacts both monthly payment and APR.

FHA mortgage insurance typically includes both a one-time Upfront Mortgage Insurance Premium and annual premiums broken down int monthly payments. The upfront premium is commonly 1.75% of the base loan amount and is often financed into the loan. The annual premium is paid monthly and varies based on loan details such as term, base loan amount, and down payment or equity position.

Mortgage insurance rules can affect the long-term cost of an FHA refinance, especially if you plan to keep the loan for many years. 

Keep in mind that FHA loans are also commonly refinanced into conventional loans to get rid of MIP.

Eligibility Requirements For FHA Refinancing

FHA refinance eligibility depends on the refinance type and lender underwriting standards. Lenders also apply overlays that can be stricter than FHA minimum guidelines.

Common qualification factors include:

• Credit profile and payment history
• Income stability and ability to repay
• Debt-to-income ratio
• Current equity and loan-to-value ratio
• Primary residence occupancy requirements
• Property eligibility and appraisal outcomes when required
• County loan limits, which can change periodically

How To Estimate FHA Refinance Savings

A simple way to evaluate an FHA refinance is to compare your total monthly cost today against the total monthly cost under a new loan.

 You can use our break-even calculator to get an idea of the potential benefits of a refinance. Keep in mind this calculator is illustrative only, and you'll need to connect with an expert loan officer to get an accurate idea of breakeven timing.

How To Choose The Right FHA Refinance Option

Choosing the right FHA refinance depends on what you want the refinance to accomplish.

If you already have an FHA loan and want to reduce your payment, an FHA Streamline Refinance might be best for you. If you want to change your loan term or rate, and are comfortable with full documentation and underwriting, you might consider an FHA rate-and-term refinance. And if you want to access equity, and can support a larger loan, and FHA cash-out refinance might be the best option for you.

Key Costs To Consider With FHA Refinances

Typical costs may include:

• Lender fees and discount points, if chosen
• Appraisal fee when required
• Title and settlement services
• Recording fees and local charges
• Prepaid items and escrow setup, depending on the loan
• FHA mortgage insurance premiums, including upfront and annual MIP

Total costs vary by lender, loan size, and property location, so the Loan Estimate is the best place to validate your actual numbers.

Frequently Asked Questions About FHA Refinance Rates

What Is The FHA Streamline Refinance?

The FHA Streamline Refinance is an FHA refinance option for homeowners with an existing FHA loan. It is designed to reduce payment or improve loan stability and often requires less documentation than a standard refinance, subject to lender policy.

Does FHA Refinancing Require An Appraisal?

Some FHA refinances require an appraisal, while certain streamline scenarios may not, depending on program guidelines and lender policy.

How Do Closing Costs Affect FHA Refinance Savings?

Closing costs reduce your short-term savings. Calculating break-even months helps you estimate how long it may take for monthly savings to exceed upfront costs.