FHA vs Conventional Loan Calculator
Enter your home price and financials below to see a side-by-side comparison of FHA and conventional mortgage options — including down payment, monthly payment, mortgage insurance, and total cost.
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, requiring as little as 3.5% down with credit scores as low as 580. A conventional loan is a mortgage not backed by a government agency, typically requiring 3-20% down with stronger credit (620+). FHA loans have mandatory mortgage insurance for the life of the loan; conventional PMI drops off at 80% LTV.
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Learn More About FHA vs. Conventional Loans
Things to Know
Essential concepts for understanding your results
Side by SideWhat are the key differences between FHA and conventional?
Down payment: FHA 3.5% vs conventional 3-5%. Credit score: FHA 580+ vs conventional 620+. Mortgage insurance: FHA MIP lasts the life of the loan vs conventional PMI drops at 20% equity. DTI limits: FHA up to 50% vs conventional 43-45%. Property standards: FHA stricter appraisal vs conventional more flexible. Loan limits: FHA $498,257-$1,149,825 by county vs conventional $766,550 ($1,149,825 high-cost).
Cost ComparisonWhich costs less over time?
For credit scores above 700 with 10%+ down: conventional is cheaper because PMI drops off at 20% equity while FHA MIP is permanent. For 580-680 credit with 3.5% down: FHA is often the only option and may offer lower rates than conventional at that score. Break-even: plan to refinance from FHA to conventional within 3-5 years once your credit improves and equity reaches 20% — this eliminates the permanent MIP.
Approval OddsWhich is easier to qualify for?
FHA is significantly easier: 580 vs 620 minimum score, 50% vs 43-45% max DTI, and more flexible income documentation. FHA manual underwriting allows compensating factors (reserves, payment history, minimal payment increase) that conventional does not. For borderline applicants, FHA approval rates are substantially higher. The trade-off: easier qualification comes with permanent mortgage insurance costs.
StrategyWhen should you switch from FHA to conventional?
Refinance from FHA to conventional when: credit score reaches 700+ (better conventional rates), home equity reaches 20%+ (eliminates PMI entirely), and rates are favorable. The permanent FHA MIP costs $100-250/month on a typical loan — eliminating it saves $6,000-15,000 over the remaining loan term. Set a calendar reminder to evaluate refinancing at the 3-year and 5-year marks.
Key Differences
| Feature | FHA | Conventional |
|---|---|---|
| Min Down | 3.5% | 3-20% |
| Min Credit | 580 | 620 |
| Mortgage Insurance | Life of loan | Until 80% LTV |
| Best For | First-time, lower credit | Strong credit, 10%+ down |
People Also Ask
Is FHA or conventional better for first-time buyers?
Can I refinance from FHA to conventional?
Does FHA mortgage insurance ever go away?
How to Use This Calculator
Enter the home price you're considering, then adjust the down payment percentage for each loan type. The calculator uses current average rates, but you can override these with actual quotes from lenders. FHA loans default to 3.5% down — the minimum allowed — while conventional loans let you enter any amount from 3% to 20% or more.
The results show your monthly payment broken down into principal, interest, taxes, insurance, and mortgage insurance for each loan type. The "Total Cost" section reveals the true difference — FHA loans often look cheaper monthly but can cost tens of thousands more over 30 years because of permanent mortgage insurance.
Example: On a $350,000 home, an FHA loan at 3.5% down ($12,250) results in a $337,750 loan. A conventional loan at 5% down ($17,500) results in a $332,500 loan. The FHA loan has a lower down payment but carries a 1.75% upfront MIP ($5,911) plus 0.85% annual MIP ($2,371/year) for the life of the loan. The conventional loan has PMI of roughly $135/month until you reach 20% equity — then it drops off entirely.
FHA vs Conventional: Complete Side-by-Side Comparison (2026)
The right mortgage depends on your credit score, savings, and how long you plan to stay in the home. Here's every meaningful difference between the two loan types:
| Feature | FHA Loan | Conventional Loan |
|---|---|---|
| Minimum down payment | 3.5% (580+ credit) 10% (500-579 credit) | 3% (first-time buyers) 5% standard |
| Minimum credit score | 500 (with 10% down) 580 (with 3.5% down) | 620 minimum 740+ for best rates |
| Mortgage insurance | 1.75% upfront MIP + 0.85% annual (life of loan with <10% down) | PMI: 0.3-1.5% annually Drops at 80% LTV (auto at 78%) |
| 2026 loan limits | $498,257 (floor) $1,149,825 (high-cost) | $806,500 (conforming) Higher = jumbo rates |
| Maximum DTI ratio | 43% standard Up to 57% with compensating factors | 36-45% typical Up to 50% with strong profile |
| Property requirements | Must meet FHA safety/habitability standards Stricter appraisal | Standard appraisal Fewer property restrictions |
| Gift funds for down payment | 100% can be gift | Allowed with documentation Some programs require 5% own funds |
| Interest rates | Typically 0.15-0.25% lower Government-backed = less lender risk | Slightly higher base rate But rate depends heavily on credit score |
Real Dollar Comparison: $300K, $400K, and $500K Homes
Here's what you'd actually pay over the first 5 years and over the full 30-year term at three common price points. Assumes 6.5% FHA rate, 6.75% conventional rate, and average PMI/MIP costs.
| Scenario | $300K Home | $400K Home | $500K Home |
|---|---|---|---|
| FHA (3.5% down) | |||
| Down payment | $10,500 | $14,000 | $17,500 |
| Monthly payment (PITI + MIP) | $2,185 | $2,890 | $3,596 |
| Total mortgage insurance (30yr) | $73,800 | $98,400 | $123,000 |
| Conventional (5% down) | |||
| Down payment | $15,000 | $20,000 | $25,000 |
| Monthly payment (PITI + PMI) | $2,105 | $2,785 | $3,466 |
| Total mortgage insurance (until 80% LTV) | $14,200 | $19,500 | $24,800 |
| Insurance savings with conventional | $59,600 | $78,900 | $98,200 |
The pattern is clear: FHA mortgage insurance costs 4-5x more than conventional PMI over the life of the loan because it never drops off (with less than 10% down). On a $400K home, that's nearly $79,000 in extra insurance costs. However, if you can only put 3.5% down and your credit is under 700, FHA may be your only path to homeownership — and the sooner you buy, the sooner you start building equity instead of paying rent.
When FHA Wins — and When Conventional Is Better
Choose FHA if: Your credit score is between 580-679 and you have limited savings. The lower down payment and more flexible qualification make homeownership possible years earlier than waiting to save 10-20%. The math changes if you plan to refinance to conventional within 3-5 years once your credit improves and you've built 20% equity.
Choose conventional if: Your credit score is 700+ and you can put at least 5% down. The PMI drops off automatically once you reach 78% LTV, and you'll save tens of thousands in total mortgage insurance costs. If your credit is 740+, conventional rates are often lower than FHA rates because lenders see you as a lower risk.
The hybrid strategy: Many savvy buyers start with FHA to get into the market quickly, then refinance to conventional once they've built equity and improved their credit. If home values appreciate 3-4% annually, you could reach 20% equity in 4-6 years even with minimal down payment. At that point, refinancing eliminates mortgage insurance entirely.
2026 FHA Loan Limits by Area
FHA loan limits vary by county based on local home prices. In 2026, the floor limit (most counties) is $498,257 for a single-family home. High-cost areas have higher limits up to $1,149,825. If your target home exceeds the FHA limit for your county, conventional is your only option.
| Area type | 2026 FHA limit | Examples |
|---|---|---|
| Floor (most counties) | $498,257 | Houston, Phoenix, Atlanta, Charlotte |
| Mid-range | $500,000-$800,000 | Denver, Portland, Nashville, Austin |
| Ceiling (high-cost) | $1,149,825 | San Francisco, NYC, LA, Seattle, DC |