The hexagonal close-packed (hcp) phase of iron is unstable under ambient conditions. The limited amount of existing experimental data for this system has been obtained by extrapolating the parameters of hcp Fe–Mn alloys to pure Fe. On the theory side, most density functional theory (DFT) studies on hcp Fe have considered non-magnetic or ferromagnetic states, both having limited relevance in view of the current understanding of the system. Here, we investigate the equilibrium properties of paramagnetic hcp Fe using DFT modelling in combination with alloy theory. We show that the theoretical equilibrium $c/a$ and the equation of state of hcp Fe become consistent with the experimental values when the magnetic disorder is properly accounted for. Longitudinal spin fluctuation effects further improve the theoretical description. The present study provides useful data on hcp Fe at ambient and hydrostatic pressure conditions, contributing largely to the development of accurate thermodynamic modelling of Fe-based alloys.