VA loans often have the lowest rates, typically 0.125-0.25% below conventional. USDA rates are also very competitive. FHA rates are moderate and conventional rates are most sensitive to credit score.
At 740+ credit score, conventional loans are very competitive. At 620-680 credit, FHA often has the best rate. VA is almost always the best option for eligible veterans.
Rate comparisons depend on your specific situation. Get quotes for all loan types you may qualify for and compare the APR, not just the interest rate.
Rate Comparison by Loan Type
VA: lowest rates typically. USDA: slightly below conventional. Conventional: competitive at high credit scores, 740+ preferred. FHA: moderate rates, lower credit accepted. Jumbo: rates may be slightly higher.
Credit Score Impact
760+: best rates across all types. 740-759: near-best rates. 720-739: good rates. 700-719: moderate rates. 680-699: higher rates. 660-679: FHA may be best option. 640-659: FHA/Non-QM options.
Real Examples
Borrower A: 780 credit, 10% down. VA: 5.75%, Conventional: 5.875%, FHA: 6.0%. Borrower B: 680 credit, 5% down. VA: 6.25%, FHA: 6.375%, Conventional: 6.75%.
When Each Wins
VA wins for veterans. USDA wins in eligible rural areas with low credit. FHA wins for low credit scores or low down payment. Conventional wins for high credit and 20%+ down.
How to Compare
Compare: APR (includes costs), monthly payment, total closing costs, and rate lock terms. Don't just compare interest rates. Two lenders with the same rate may have very different closing costs.
Rate vs APR
The APR includes the interest rate plus lender fees, discount points, and some closing costs. It gives you a more complete picture of the true cost of the loan.