Compare FHA vs conventional loans side by side: down payment, MIP vs PMI, monthly payment, and total cost over the life of the loan.
A homebuyer compares FHA (3.5% down) vs Conventional (5% down) on a $300,000 home at 6.5% interest for 30 years.
FHA: $10,500 down + $5,066 financed UFMIP → Monthly $1,994.55 (P&I $1,861.86 + MIP $132.69)
Conventional: $15,000 down → Monthly $1,967.64 (P&I $1,801.39 + PMI $166.25)
Total Cost (30yr): FHA $718,037 vs Conventional $670,946 — Conventional saves $47,091 overall.
Conventional PMI cancels at month 135 (11.3 years), saving $47,767 in total insurance costs vs FHA's lifetime MIP.
With 10% down ($30,000), FHA MIP cancels after 11 years, while conventional PMI cancels at 78% LTV.
FHA: Monthly $1,860.20 (P&I $1,736.45 + MIP $123.75 for 132 months)
Conventional: Monthly $1,864.08 (P&I $1,706.58 + PMI $157.50 cancels at month 109)
Total Cost: FHA $641,457 vs Conventional $631,538 — Conventional saves $9,919.
At 10% down, the gap narrows significantly. FHA's 11-year MIP limit makes it more competitive with conventional loans.
A buyer with 20% down avoids PMI entirely on a conventional loan, but FHA still requires MIP for life.
FHA (3.5% down): Monthly $1,994.55 — Total Cost: $718,037
Conventional (20% down): Monthly $1,516.96 — Total Cost: $546,107
Savings with 20% Conventional: $171,931 over 30 years and $477.59/month.
If you have 20% down, a conventional loan is almost always the better choice. The FHA loan's lifetime MIP and lower loan amount make it significantly more expensive in this scenario.
This calculator compares the total cost of FHA loans (insured by the Federal Housing Administration) against conventional loans (conforming to Fannie Mae/Freddie Mac guidelines). The core difference is how mortgage insurance works: FHA requires both upfront and annual MIP, while conventional loans require PMI only when the down payment is under 20% — and PMI can be canceled.
A mortgage insured by the Federal Housing Administration. Allows 3.5% down payments with a 580 credit score. Requires upfront MIP (1.75%) and annual MIP (0.55%) for the life of the loan if less than 10% down.
A mortgage that conforms to Fannie Mae and Freddie Mac guidelines. Requires 3% minimum down (5% typical). PMI is required only if the down payment is under 20% and can be canceled at 78-80% LTV.
MIP (Mortgage Insurance Premium) is required on all FHA loans. PMI (Private Mortgage Insurance) is required on conventional loans with less than 20% down. PMI is cancelable; FHA MIP is not (unless ≥10% down, then 11 years).
Loan-to-Value ratio = Current Loan Balance ÷ Original Home Price. PMI automatically cancels when LTV reaches 78%. Borrowers can request cancellation at 80% LTV.
If you have 3.5-5% down, FHA may have lower monthly payments than conventional with PMI. But conventional PMI eventually cancels, while FHA MIP may last forever.
With 20% down on a conventional loan, you avoid PMI entirely. This typically saves $150-$300/month and tens of thousands over the loan term compared to an FHA loan.
FHA accepts credit scores as low as 580 (with 3.5% down). Conventional loans typically require 620+. If your score is below 620, FHA may be your only option.
FHA loan limits vary by county (typically $498,257-$1,149,825 in 2026). Conventional conforming limits are $806,500 in most areas (higher in high-cost areas).
Choosing between an FHA loan and a conventional loan is one of the most important decisions you'll make as a homebuyer. Each loan type has distinct advantages, and the right choice depends on your down payment, credit score, financial goals, and how long you plan to stay in the home. This calculator helps you compare the total cost of each loan side by side — including mortgage insurance, interest, and all fees — so you can make an informed decision.
FHA loans are backed by the Federal Housing Administration and are designed to help buyers with lower credit scores and smaller down payments. They require a minimum of 3.5% down and accept credit scores as low as 580. However, FHA loans require Mortgage Insurance Premium (MIP) — both an upfront premium of 1.75% of the loan amount and an annual premium of 0.55% paid monthly. If your down payment is less than 10%, MIP lasts for the entire loan term. If you put 10% or more down, MIP cancels after 11 years.
Conventional loans conform to Fannie Mae and Freddie Mac standards. They require a minimum of 3% down (though 5% is more typical) and a minimum credit score of 620. With less than 20% down, you'll need Private Mortgage Insurance (PMI), which typically costs 0.5% to 1.0% of the loan amount per year. The key advantage: PMI automatically cancels when your loan balance reaches 78% of the home's original value, and you can request cancellation at 80% LTV.
Over the life of a 30-year loan, these differences can add up to tens of thousands of dollars. Use our calculator above to compare your specific numbers and see which loan type saves you more money.
| Feature | 🏠 FHA Loan | 🏦 Conventional Loan |
|---|---|---|
| Min Down Payment | 3.5% | 3%–5% |
| Min Credit Score | 580 (3.5% down) | 620 |
| Upfront Insurance | 1.75% UFMIP | None |
| Monthly Insurance | MIP 0.55%/yr | PMI 0.5%–1.0%/yr |
| Insurance Cancellation | Life of loan (<10% down), 11yr (≥10% down) | Auto at 78% LTV, request at 80% LTV |
| Debt-to-Income Limit | Up to 57% | Typically 43%–50% |
| Loan Limits (2026) | $498,257–$1,149,825 (by county) | $806,500 (most areas) |
| Assumable? | Yes (buyer can take over) | No |
⚠️ Important Disclaimer: This FHA vs Conventional Loan Calculator is for informational and educational purposes only. It provides estimates based on standard mortgage formulas and current FHA/HUD guidelines. Actual loan terms, rates, and insurance costs vary by lender, location, credit score, and loan-to-value ratio. This calculator does not account for property taxes, homeowners insurance, HOA fees, or other costs. Results should be verified with a licensed mortgage professional before making any financial decisions. This calculator does not provide financial advice.