Average market rates for December 03, 2025 are 5.56% for 30-year fixed FHA refinance
| Product | Rate | APR |
|---|---|---|
| 30-year Fixed Fha Refinance | 5.56% | 6.77% |
How we source rates and rate trends
FHA Interest Rate Trends
Mortgage rates aren’t what they used to be. FHA rates are no exception. Freddie Mac reports that mortgage rates doubled from January to October 2022. But rates are again falling. FHA homebuyers who purchased since mid-2022 could potentially save with a refinance.
| Product | Rate | APR |
|---|---|---|
| 30-year Fixed Fha Refinance | 5.56% | 6.77% |
| 30-year Fixed Refinance | 6.35% | 6.37% |
Will FHA Refinance Rates Fall?
FHA rates are unpredictable. The only certainty is that they will change.
That being said, mortgage rates of all kinds are on an overall downward drift from recent highs. That could mean periods of rising rates amid an overall decline. The Federal Reserve is expected to cut its key interest rate through 2025 according to its projection materials, helping FHA refinance rates.
Fannie Mae predicts falling rates through 2025. While projections aren’t always reliable, the consensus is that FHA refinance rates could continue to drift downward.
What Impacts FHA Interest Rates?
FHA rates rise and fall depending on what’s happening in the market. Mortgage rates change on market forces just like the stock market — and are equally unpredictable.
When FHA refinance rates rise with:
- High inflation
- A strong economy
- Low unemployment rates
- Rising federal funds rate (the rate the Federal Reserve controls)
FHA refinance rates might fall when:
- The economy appears close to a recession
- Unemployment rates rise
- Wars are likely
- The Federal Reserve is predicted to cut the federal funds rate
In general, a strong economy creates higher rates. This is because mortgage rates are driven by mortgage bond interest rates. Investors buy mortgage bonds in times of economic insecurity because they are viewed as a safe-haven asset. It’s a little like someone buying gold if they are afraid of economic collapse, but not as extreme.
When the economy is good, investors believe they can make a bigger return in the stock market. This puts less demand on mortgage bonds. Interest rates on theses bonds must rise to keep investors buying. But this increases the interest rates on the mortgages underlying these bonds.
More FHA Refinance Information
Types of FHA Refinances
There are six types of FHA refinances. The most common ones are:
FHA Streamline Refinance: This program lets eligible homeowners drop their rate and payment when mortgage rates drop. It does not require pay stubs, tax returns, employment verification, or even an appraisal. This results in a more efficient refi process.
Standard FHA Refinance: You can refinance using an FHA loan if you don’t have an FHA loan currently or want to wrap closing costs into the new loan. (You can’t roll in closing costs on an FHA Streamline.)
FHA Cash-Out Refinance: You can tap into your home’s equity for a remodel, debt consolidation, or any other purpose, even with a lower credit score. Your new loan can be up to 80% of the home’s current value.
Reasons to Refinance
There are hundreds of reasons someone might want to refinance. The most popular ones are to:
- Reduce your rate and payment
- Convert a 30-year mortgage to 15 years or vice versa
- Renovate a property
- Tap into cash to purchase an investment property or second home
- Pay off high-interest consumer debt or a 2nd lien on the home
- Pay out equity in a divorce settlement
Make sure a refinance benefits you financially. If you don’t recoup closing costs within about three years, it’s probably better to wait.
How Soon Can You Refinance?
There are a few timing considerations when looking into an FHA refinance soon after you received your loan.
Seasoning: FHA requires 210 days and six payments since opening your current FHA loan to be eligible for a streamline refinance. You may be eligible for an FHA upfront mortgage insurance refund if refinancing within three years.
Net Tangible Benefit: To qualify for an FHA streamline refinance, you must reduce your rate by at least 0.50% for fixed-rate refinances including any mortgage insurance reduction. Refinancing from or to an adjustable-rate mortgage comes with separate rules.
Break-Even Point: Determine how long it will take for monthly savings to recoup closing costs. If longer than two or three years, a refinance is likely not worth it.
The Costs of Refinancing
Refinancing can cost thousands of dollars, so proceed with caution. The costs can really add up, rendering a refinance worthless very quickly.
- Origination fee of up to 1%
- FHA UFMIP (you may be eligible for a refund from your previous loan.)
- Title report
- Credit report
- Flood zone determination report
- Surveys
- Appraisal (if one is required)
- Application or processing fees
- Escrow or notary
- Tax service
- Doc prep fees
- Settlement fees
Some lenders can offer you a higher rate that’s still lower than your current rate in exchange for covering all or part of your closing costs. Check options with your lender.
Shop Multiple Lenders
Each lender offers different FHA rates, and each one of those rates changes daily. Some lenders may want to increase FHA loan production and cut rates. Other lenders may do the opposite. It’s worth checking with three to five lenders — banks, credit unions, and non-bank mortgage companies.
Get a Loan Estimate or LE from each lender you speak with so you can compare closing costs, not just the rate.
Is It Time to Use an FHA Refinance?
FHA is a fantastic refinance option, allowing even lower-credit homeowners potentially receive lower rates without much documentation or an appraisal.
Get your FHA refinance quote. Start here.
