March 4, 2021

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Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

Conventional Loan Interest Rates Make History, FHA Loan Rates Still Incredibly Low

Low mortgage rates have stolen the headlines on some finance blogs; as a result, 2020 has seen high volumes of refinance loan applications. The low rates also has many renters potentially finding themselves in a more affordable position to become homeowners.

But another development has taken things in an even more historic direction; in June 2020 conventional loan rates made big headlines by plunging below the three percent threshold.

The sub-three percent range has been familiar territory for FHA mortgage loans and VA mortgages. The same day conventional rates fell below three percent, the best-execution FHA mortgage loan interest rate for a 30-year fixed rate mortgage was reported at 2.50%.

The rates offered to any borrower will depend on the type of loan, the loan term, and other variables. Borrowers also have to contend with closing costs, which may be higher on sub-three percent interest rate mortgages dependning on the lender and other factors.

That is an important factor to keep in mind–not all lenders offer the same mortgage loan rates –you do best when shopping around for the best rates and terms.

Some believe mortgage rates could drop even further and they delay making an interest rate lock commitment with the lender in hopes for an even more affordable loan.

But some finance writers are saying that rates seen now could go away and not return for many years. Much depends on the state of the economy, investor behavior, whether or not there’s a pandemic or a trade war, etc.

If you are considering your options for a home loan or home refinance loan, remember that if your credit scores are not high enough, you won’t be offered the most competitive rate.

But even when being offered a higher rate (in current conditions) mortgage rates are still historically low; the rate you might be offered would be even higher if the going rate were above three percent.

The choices you make in preparing your credit ahead of your loan application will affect your ability to get the lowest mortgage rate possible based on your financial qualifications.

Don’t hesitate to seek credit counseling or subscribe to credit monitoring services to help you accomplish your financial goals.

Joe Wallace - Staff Writer

By Joe Wallace

June 12, 2020

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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