September 22, 2021

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Mortgage Loan Interest Rate Trends

Mortgage Rate Trends

FHA mortgage loan rates have had a wild ride in 2020, and that is likely not over headed into the November and December holiday seasons.

The 52-week average for government-backed mortgage loan interest rates has a bottom at 2.25%, which is significant since mortgage loan rates had, until this year, rarely seen territory below the three percent range.

And the upper end of the 52-week average at the time of this writing is four percent–that should give you a good idea of how rates have fluctuated in the last 12 months. There is still plenty of uncertainty over which way rates might trend into the new year after the election season, continued issues with COVID-19, etc.

At the time of this writing, the best-execution FHA mortgage rates (assuming ideal conditions) is 2.40%. It’s a bit higher than the low end of the 52-week average, but still considered very low compared to rates issued pre-coronavirus.

Compare that going rate to the (at press time) conventional loan equivalent; 30-year fixed rate conventional mortgages are just under three percent coming in at a best-execution 2.96%. The day prior conventional best-execuction rates moved into the low three percent range.

As usual there are many factors that could affect the future of FHA, VA and conventional mortgage rates. Will things remain below the three percent range for government-backed mortgages?

The pandemic is obviously an x-factor here and it’s not safe to assume rates will definitely spike and move above the three percent threshold again. Nor is it safe to assume rates will continue to be this low. There is no clear winner for the 2020 presidential election at the time of this writing and that could play a role in how investors behave in the meantime.

And investor reaction can, in the right markets, trigger rate drops or spikes. So we’re going to be playing a waiting game as we wait for the polls, progress on COVID-19, and other factors. What borrowers should know right now?

If you were already planning a refinance or purchase loan the rates at press time are favorable to you, but remember that your FICO scores and other credit qualifications will affect the rate you are offered.

If your credit is not ready for a loan due to a lack of 12 months of on-time payments on all financial obligations, low credit scores, or other issues, don’t panic about not being able to commit to a new mortgage or refinance loan.

Work on your credit and other financials and take a look at the rates when you are ready to apply.

The rates you see now won’t help you if you aren’t financially ready to apply. It is better to apply for the loan when you are ready instead of risking loan denial because you didn’t take enough time to get your financial house in order.

Remember that you can always contact the FHA directly at their toll-free number 1-800 CALL FHA to request a referral to a HUD-approved housing counseling agency that can help you with loan prep, credit questions, and more.

Joe Wallace - Staff Writer

By Joe Wallace

November 5, 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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