Quick Answer
Loan types carry different pricing in general: VA often runs the lowest rates at about 0.125% to 0.25% below conventional, USDA is right there with it, FHA lands moderate, and conventional depends heavily on your credit score. Jumbo and non-QM sit above the rest. That ordering matters, but your personal score, down payment and property decide the real quote. Ask Patrick how comparing rates across loan types would affect your payment.
Here is the money problem, Patriot Nation: three lenders quote you three different rates and you have no idea which loan type is actually priced best for you. Loan types carry different pricing in general, but your credit score, down payment, and property decide the real number. The ordering matters less than comparing the right things: the APR, the payment, and the total cost.
How rates compare by loan type
In general, VA loans often run the lowest rates, typically about 0.125% to 0.25% below conventional. USDA rates are right there with them, very competitive for eligible rural buyers. FHA rates land moderate, and conventional rates depend heavily on your credit score. Jumbo and non-QM loans sit above the rest. That is the general ordering, and your personal situation decides the actual quote.
The meaning in plain English: the loan program sets a pricing range, and your file picks the spot inside it.
The money side: the spread between loan types is real, but the spread between lenders can be just as wide.
The real-world consequence: get quotes for every loan type you may qualify for, on the same day.
How credit scores shift the pricing
At 760 and above, you get the best rates across every type. From 740 to 759, near-best. From 720 to 739, good rates. From 700 to 719, moderate. From 680 to 699, higher. Below 680, FHA often becomes the best option because it accepts lower scores with less pricing penalty, and below 640, FHA or non-QM options come into play. The same borrower can see a very different rate ladder depending on where the score lands.
The meaning: credit score is the biggest personal lever on the rate, and it shifts the loan type ranking too.
The money side: a 50-point score difference can move you a full pricing tier on every loan type.
The real-world consequence: know your score before you compare, because the comparison only makes sense at your score.
Two real examples
Borrower A has a 780 score and 10% down. VA might quote 5.75%, conventional 5.875%, and FHA 6.0%. Borrower B has a 680 score and 5% down. VA might quote 6.25%, FHA 6.375%, and conventional 6.75%. Notice the order can flip: at lower scores, FHA and VA pull ahead of conventional because their pricing penalizes credit less.
The meaning: the loan type ranking is not fixed, it moves with the borrower's credit and down payment.
The money side: the same market can produce a different best loan for two different borrowers.
The real-world consequence: run your own example with your real score and down payment before you pick a program.
When each loan type wins
VA wins for eligible borrowers who want the lowest rate with zero down and no mortgage insurance. USDA wins in eligible rural areas with competitive rates and zero down. FHA wins for lower credit scores and smaller down payments. Conventional wins for high credit scores and 20% or more down, where the mortgage insurance disappears entirely.
The meaning: each program is built for a different borrower, and the best one fits your profile.
The money side: the winner is the loan with the lowest all-in cost for your situation, not the lowest headline rate.
The real-world consequence: match the program to your credit, cash, and property, and let the APR settle the tie.
The right way to compare
Compare the APR, which includes the rate plus lender fees, discount points, and some closing costs, along with the monthly payment, total closing costs, and rate lock terms. Two lenders with the same rate can have very different closing costs, so the interest rate alone never tells the whole story. Compare the same loan type, the same day, on the same terms.
The meaning: the rate is the headline, and the APR is the fine print that carries the real cost.
The money side: a slightly higher rate with lower fees can beat a lower rate with heavy points.
The real-world consequence: line up the Loan Estimates side by side and compare the same fields.
Rate vs APR
The APR is the interest rate plus the cost of the loan spread across the term, which is why it is almost always higher than the rate. The term to know: APR stands for annual percentage rate, and it is the closest single number to the true cost of borrowing. When two lenders quote the same interest rate, the one with the lower APR is usually the cheaper loan.
The meaning: the APR bakes the upfront costs into the rate, so you can compare apples to apples.
The money side: the lower APR wins when everything else is equal, and it is the number the regulators want you to see.
The real-world consequence: read both numbers, and make it a great one.
Ask Patrick about comparing rates across loan types
Get a straight answer on comparing rates across loan types and what it means for your payment and budget.
