USDA Home Loan Rates
Current USDA Mortgage Rates
USDA loan rates change daily based on market conditions. See current USDA loan rates for each USDA loan type below.
| USDA Loan Type | Interest Rate | APR | Points |
|---|---|---|---|
| 30-Year Fixed USDA Purchase | 6.625% | 7.333% | 0.3130 ($790.40) |
| 30-Year Fixed USDA Streamline Refinance | 6.625% | 7.314% | 0.1250 ($315.66) |
Start here for a custom USDA loan rate.
USDA Direct Loan Rates
USDA Direct Loans are a different type of home loan program exclusively funded by the U.S. Department of Agriculture (USDA). Borrowers can only apply for this program through their local Rural Department Office, and cannot obtain these loans from private banks or mortgage companies like Neighbors Bank.
The USDA direct loan rate is currently 5.00%. The USDA periodically adjusts this flat rate and may tailor it to each borrower's situation. In addition, payment assistance can reduce the effective interest rate to as low as 1%, depending on the borrower's income and need.
Learn more about USDA guaranteed vs. USDA direct loans.
Why Are USDA Direct Rates Lower?
USDA direct loans are limited to low- and very low-income households earning no more than 80% of the area median income in eligible rural areas.
Because this program is designed to serve households with limited financial resources, USDA direct loan interest rates are typically lower than USDA guaranteed loans and other mortgage options. The U.S. Department of Agriculture subsidizes a portion of the loan interest, allowing the program to offer reduced rates and improve affordability.
The sections below focus on USDA guaranteed loan interest rates, which are set by private lenders and fluctuate with market conditions.
What Factors Affect USDA Loan Rates?
Like most types of mortgage loans, USDA guaranteed loan interest rates are set by private lenders.
Rates vary based on several factors, including:
- Market Conditions – USDA loan rates are influenced by overall economic factors, such as the Federal Reserve's monetary policy, inflation, and bond market performance. When market rates rise or fall, USDA loan rates typically follow suit.
- Lender Pricing and Competition — Because USDA guaranteed loans are issued by private lenders, interest rates can vary slightly from one mortgage lender to another. Each lender sets its own rates based on pricing models, risk tolerance, and market competition.
-
Credit Score – Borrowers with higher credit scores usually qualify for lower interest rates since they are generally viewed by mortgage lenders as lower risk. While USDA loans
are available to those with lower credit scores, a strong credit profile can secure better pricing. Toggle the credit score field in the rate table above to get a better estimate of your
rate.
Neighbors Bank's minimum credit score is typically 620. - Discount Points – Many lenders allow borrowers to buy "discount points" at closing in exchange for a lower interest rate. One discount point usually equals 1% of the loan amount, and paying points can reduce monthly payments and total interest costs over the life of the loan.
USDA Loan Rate Trends Over Time
This chart shows what the average available USDA loan rate was from Neighbors Bank for each week listed. Not all consumers received this average rate and all eligibility for rates is based on individual factors including credit score. View Full Rate Assumptions
USDA guaranteed interest rates tend to move in the same direction as the overall mortgage market. Over the past several years, those movements have been largely shaped by economic and Federal Reserve policy changes.
Following the COVID-19 pandemic, rates reached historic lows in 2020 and 2021, with 30-year fixed-rate mortgages averaging around 2.65% in January 2021. However, starting in March 2022, the Federal Reserve began raising the federal funds rate to combat rising inflation, which led to higher borrowing costs across various loan types, including USDA loans.
By mid-2023, rates had climbed significantly, with the average 30-year fixed-rate mortgage peaking around 7.05% in October 2023. This number slowly trickled down over the next few years.
By July 2025, the 30-Year Fixed Rate USDA Mortgage Index stood at around 6.385% and recently dipped below 6.2% in 2026—the lowest in years.
USDA Loan vs. FHA, VA, & Conventional Loan Rates
| Loan Type | Interest Rates Trends (on average) | Unique Eligibility Requirements |
|---|---|---|
| USDA | Typically lower than conventional and FHA | Only for medium- to low-income borrowers buying in rural or suburban areas |
| FHA | Typically lower than conventional | No unique requirements. FHA loan limits and FHA mortgage insurance apply |
| VA | Typically lower than USDA, FHA, and conventional loans | Eligible Veterans and service members only |
| Conventional | Typically higher than USDA, FHA, and VA loans | No unique requirements*; conventional loan limits and private mortgage insurance apply |
*Most conventional loans do not require unique eligibility requirements other than the financial qualifications required by private lenders. However, Fannie Mae’s HomeReady and Freddie Mac’s Home Possible offer low down payment conventional loan programs that require borrowers to meet certain income limits.
How to Get The Best USDA Loan Rate
Securing the best USDA mortgage rates can significantly impact your monthly payments and the total cost of your loan over time. Here are some strategies:
- Improve Your Credit Score: A higher credit score shows USDA lenders that you're a lower risk, often resulting in better interest rates. Pay down debts, make all payments on time, and correct any errors on your credit report to improve your score.
- Compare Loan Estimates from Multiple Lenders: USDA loan rates and fees can vary between lenders, so it's important to compare official Loan Estimates. Review interest rates, discount points, closing costs, and lender fees side by side to understand the true cost of each offer before choosing a lender.
- Buy Down Your Rate with Points: You may be able to lower your interest rate by paying for discount points upfront. Ask your lender if buying points makes sense for your budget and long-term goals.
- Monitor Rate Trends: If your buying timeline is flexible, keep an eye on rate trends and market news to help you lock in a favorable rate. Once you find a rate that fits your goals, consider locking it in to protect against potential increases while your loan is being processed.
