Jumbo Mortgage Calculator

What Is a Jumbo Mortgage?

A jumbo mortgage is any home loan that exceeds the Federal Housing Finance Agency (FHFA) conforming loan limit of $766,550 in most US counties for 2026. In high-cost areas like San Francisco, Los Angeles, and New York City, the limit rises to $1,149,825. Loans above these thresholds cannot be purchased by Fannie Mae or Freddie Mac, meaning lenders keep them on their own books and charge higher rates to compensate for the additional risk.

Jumbo loan rates are typically 0.25-0.50% higher than conforming rates. On a $1 million loan, that 0.25% difference adds approximately $150/month or $54,000 over 30 years. Requirements are stricter: most lenders require a minimum 20% down payment, credit scores of 700-720+, debt-to-income ratios below 43% (often 36%), and cash reserves covering 6-12 months of payments. Some borrowers split large loans into a conforming first mortgage plus a second mortgage to avoid jumbo pricing.

Jumbo vs Conforming: Key Differences

The most significant differences between jumbo and conforming loans go beyond the rate. Down payment: conforming loans allow as little as 3% down with PMI, while jumbo loans typically require 10-20% minimum. On a $1.2 million home, that means $120,000-$240,000 upfront vs $36,000 for a conforming loan. Documentation: jumbo lenders require more extensive income verification, often including two years of tax returns, asset statements, and proof of reserves. Appraisal: jumbo loans may require two independent appraisals instead of one.

Despite higher barriers, jumbo loans offer advantages for high-net-worth borrowers: no PMI requirement (since the down payment is large), interest-only payment options from some lenders, and the ability to finance luxury properties. For borrowers in high-cost markets, jumbo loans are often the only option for purchasing a median-priced home.

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