If your credit score is sitting at 614 and the rate table in front of you says 6.6% for a 30-year fixed, that number isn’t yours. It belongs to the borrower at 780 with 20% down and two months of reserves. You’re going to get a different quote, and it’s better to know the size of the gap before you fall in love with a house.
Here’s the honest version of how 30-year mortgage rates with bad credit actually work, including the score bands where pricing breaks, the loan programs that stay open when conventional lending shuts the door, and the handful of moves that can shave half a point off your rate faster than six months of credit repair.
What a low score really costs on a 30-year loan
Mortgage pricing isn’t one number. It’s a base rate plus a stack of adjustments, and credit score sits near the top of that stack. Fannie Mae and Freddie Mac use loan-level price adjustments (LLPAs) that are expressed as a percentage of your loan amount. A borrower at 620 with a small down payment can hit adjustments two to three percentage points higher than a borrower at 760. On a $320,000 loan, that’s $6,400 to $9,600 of cost, delivered either as a higher rate or as discount points you pay at closing to buy the rate back down.
Run the math on a real scenario. A $320,000 30-year fixed at 8.125% costs about $2,376 a month in principal and interest. The same loan at 6.625% costs $2,049. That’s $327 a month, or roughly $117,000 across the full term. Bad credit on a 30-year mortgage is expensive precisely because the term is long: the rate penalty compounds over 360 payments.
Private mortgage insurance adds a second layer. Below 20% down, a 620 score typically pushes MI into the 1.0% to 1.4% of loan balance range annually, versus maybe 0.4% for a prime borrower. On $304,000 borrowed, that’s another $250 or more per month.
Why the advertised rate never matches your quote
Rate tables are marketing. They’re built from the best-case scenario: owner-occupied, single-family, 40% down, 780 score, no cash-out. Lenders publish those numbers because they rank well, then price your actual file on the back end. Even borrowers with excellent credit rarely get the advertised figure once the loan amount, property type, and occupancy adjustments land. If you want a clearer picture of how that pricing gap works, the lowest 30-year mortgage rates usually aren’t on the rate table at all, and the reason has nothing to do with your credit.
Add a 620 score on top and the spread widens further. Lenders also apply their own overlays, which are internal rules stricter than the agency guidelines. One lender might require a 640 minimum for any conventional loan. Another will go to 620 but cap the debt-to-income ratio at 43% instead of 50%. Your rate quote reflects those overlays as much as it reflects your FICO score.
Which loan programs still work with a rough credit file
The program you choose changes your rate more than almost anything else you control. Each one treats credit damage differently.
FHA: the most forgiving of the mainstream options
FHA allows a 580 score with 3.5% down, and it will go down to 500 if you bring 10% down. The trade-off is mortgage insurance for the life of the loan in most cases, plus an upfront premium of 1.75% of the loan amount. On the plus side, FHA pricing is less score-sensitive than conventional, so the gap between a 620 and a 760 borrower is narrower. FHA 30-year rates have a mortgage insurance cost baked in that the advertised number leaves out, and that’s the figure you should be comparing against a conventional quote.
VA: no minimum score in the guidelines
VA doesn’t set a credit score floor. Individual lenders do, and most land somewhere between 580 and 640. If you have entitlement left and a score in the low 600s, VA is frequently the cheapest path to a 30-year fixed, partly because there’s no monthly mortgage insurance. The funding fee is a one-time cost that can be rolled into the loan. VA 30-year rates are usually quoted below conventional rates, and the gap tends to hold even for borrowers with damaged credit.
USDA: rural, zero down, score-sensitive
USDA loans allow 100% financing and compete well on rate, but most lenders want a 640 score and USDA itself flags files below that for extra scrutiny. If you’re buying outside a metro area and your score is 640 to 680, it’s worth pricing. USDA 30-year rates come with an upfront and annual guarantee fee that behaves like mortgage insurance, so compare the full payment, not the note rate.
Conventional: cheapest rate, strictest credit
Conventional loans have the lowest base pricing and the harshest score penalties. Below 620, most lenders simply won’t write one. Between 620 and 679, you’ll pay for it. If you can get to 700 with a couple of clean tradelines and a paid-down balance, conventional often becomes cheaper than FHA once you account for mortgage insurance, especially with 10% or more down. Conventional 30-year rate quotes depend heavily on the LLPAs stacked onto your file, so ask any lender to break those out line by line.
Realistic rate ranges by score band
These are typical adjustments against a prime-scenario advertised rate, assuming 5% down and a single-family primary residence. Individual lenders vary, sometimes by a lot.
- 760 and up: you get the advertised rate, or within 0.125% of it.
- 740 to 759: roughly the ad rate, maybe 0.125% higher.
- 700 to 739: add 0.25% to 0.5%.
- 660 to 699: add 0.5% to 0.875%; lender overlays start to bite.
- 620 to 659: add 1.0% to 1.5%, plus higher mortgage insurance if under 20% down.
- 580 to 619: conventional is mostly closed; FHA at 3.5% down is the realistic route.
- Below 580: FHA with 10% down, a co-borrower, or a deliberate pause to rebuild.
Three levers that move your rate as much as your score
Discount points and temporary buydowns
One point typically buys about 0.25% off the rate. Two points on a $320,000 loan costs $6,400 and might drop you from 8.0% to 7.5%, which saves $117 a month and breaks even in about four and a half years. A 2-1 temporary buydown, where the seller funds a lower payment in years one and two, can help you qualify when your debt-to-income ratio is tight even if it doesn’t change the note rate.
Down payment size
Moving from 5% to 10% down does two things at once: it lowers the loan amount and it improves your LLPA bracket. On certain score tiers, crossing the 80% loan-to-value line eliminates mortgage insurance entirely, which is often worth more per month than the rate improvement. A $16,000 larger down payment can cut $300 from the monthly payment once MI disappears.
Who else is on the loan
Mortgage pricing uses the lowest mid-score among borrowers on an FHA loan and the average of mid-scores on a conventional loan. Adding a parent or partner with a 760 score to a conventional application can pull the pricing average up sharply. On FHA it does the opposite: one weak score drags the whole file down. Structure matters here, so ask a loan officer to model both.
How to shop when your credit is bruised
Get four quotes, not one, and get them in writing on a Loan Estimate within the same week so the pricing environment is comparable. Tell each loan officer your mid-score upfront. Anyone who quotes you a rate without pulling credit is quoting a fantasy.
Ask three questions of every lender. What LLPAs are in this pricing? What is your minimum score for this program? And what would change if my score rose 40 points before closing? That last question tells you whether waiting two months is worth more than the house you’re looking at right now.
Watch the lock period, too. A 45-day lock is priced tighter than a 60-day lock, and a bad-credit file usually takes longer to underwrite because it needs manual review instead of an automated approval. Budget for the longer window rather than paying to extend a lock later at a worse price.