Mortgage · Calculator · 2026
FHA vs Conventional Mortgage Calculator
Enter your home price, down payment, and credit score to compare your exact monthly payment, MIP vs PMI cost, and total 30-year cost for both loan types.
For buyers with 680+ credit who can put 5–10% down, conventional is usually cheaper long-term because PMI drops off at 20% equity while FHA MIP stays for the life of the loan. For buyers with credit below 680 or a down payment under 5%, FHA typically offers lower rates that partially offset the higher mortgage insurance cost. Use the calculator below to compare your exact numbers.
FHA vs Conventional Payment Calculator
2026 MIP and PMI rates · Current loan limits · Instant side-by-side results
FHA vs Conventional — Full Comparison
| Feature | FHA Loan | Conventional |
|---|---|---|
| Min. Credit Score | 580 (3.5% down) / 500 (10% down) | 620 typical; 740+ for best rates |
| Min. Down Payment | 3.5% (580+ credit) | 3% HomeReady/Home Possible; 5% standard |
| 2026 Loan Limit | $498,257 standard; $1,149,825 high-cost | $766,550 standard; $1,149,825 high-cost |
| Upfront Fee | 1.75% MIP added to loan balance | None |
| Monthly Insurance | 0.55%/yr MIP (most loans) | 0.20–1.80%/yr PMI (credit/LTV-based) |
| Insurance Duration | Life of loan (<10% down); 11 yrs (10%+ down) | Cancels automatically at 80% LTV |
| Max DTI | Up to 57% with compensating factors | 45–50% typical |
| Property Condition | Must meet FHA Minimum Property Standards | More flexible appraisal standards |
| Gift Funds | 100% of down payment can be gifted | Allowed; varies by program |
| Refinance Options | FHA Streamline (no appraisal) | Rate/term and cash-out refi |
| Best for | Credit 580–679; limited down payment; high DTI | Credit 680+; 5%+ down; long-term hold |
When FHA is the better choice
FHA loans make the most sense when your credit score is below 680. In this range, FHA rates are substantially more competitive than conventional, and approval odds are higher. A 620 credit score borrower typically saves 0.3–0.5% in rate with FHA — partially offsetting the higher mortgage insurance cost.
FHA also wins when you have a high debt-to-income ratio. FHA accepts DTI up to 57% with compensating factors; most conventional lenders cap at 45–50%. If you have significant student loans or other recurring debts, FHA may be your only qualifying option.
Finally, FHA wins short-term for buyers who plan to sell or refinance within 5–6 years before the cumulative MIP cost exceeds the lower upfront rate advantage.
When conventional is the better choice
Conventional wins when your credit score is 680 or above and you can put at least 5% down. At 720+, conventional rates are lower than FHA rates, and PMI drops off automatically at 20% equity — something FHA MIP never does on loans with less than 10% down.
Conventional wins decisively on higher-priced homes. The 2026 FHA loan limit is $498,257 in most counties; conventional goes to $766,550. If you are buying above $500,000 in a standard market, conventional is likely your only conforming option.
If the home needs repairs, conventional appraisals are more flexible. FHA requires homes to meet strict Minimum Property Standards — peeling paint, broken windows, and certain structural issues can kill an FHA appraisal that a conventional appraisal passes.
Frequently Asked Questions
Which is cheaper — FHA or conventional mortgage?
For buyers with 680+ credit who can put 5–10% down, conventional is usually cheaper long-term because PMI drops off at 20% equity. FHA MIP is mandatory for the life of the loan if you put less than 10% down. For buyers with credit below 680 or minimal down payment, FHA typically has lower rates that offset the MIP cost short-term.
When does PMI drop off a conventional loan?
PMI on a conventional loan automatically cancels when your loan balance reaches 80% of the original home value — typically 9–12 years into a 30-year loan with standard payments. You can also request cancellation once you reach 20% equity through appreciation or extra payments, or the servicer must cancel it at 78% LTV by law.
Is FHA MIP permanent?
If you put less than 10% down on an FHA loan, the annual MIP (0.55%/year) is required for the life of the loan. If you put 10% or more down, MIP drops after 11 years. The 1.75% upfront MIP is added to your loan balance at closing regardless of down payment. The only way to eliminate FHA MIP once it's locked in is to refinance into a conventional loan.
What are the 2026 FHA loan limits?
The 2026 FHA conforming loan limit is $498,257 in most U.S. counties. High-cost areas (including most major metro markets in California, New York, Hawaii, and parts of Colorado, Virginia, and New Jersey) allow up to $1,149,825. Conventional conforming limits are $766,550 standard, $1,149,825 high-cost — check HUD's county lookup for your specific market.
Can I put 3% down on a conventional loan?
Yes — Fannie Mae HomeReady and Freddie Mac Home Possible allow 3% down payments with income restrictions (generally below 80% of area median income). Standard conventional loans require 5% down for most borrowers. FHA requires 3.5% down with a 580+ credit score, or 10% down with 500–579 credit.
Should I refinance from FHA to conventional?
Once you have 20% equity, refinancing from FHA to conventional typically saves $150–$350/month by eliminating MIP. Break-even calculation: divide closing costs by monthly savings. If closing costs are $4,000 and monthly savings are $250, you break even in 16 months — very much worth it if you plan to stay. Wait until you hit 20% equity to minimize the new loan's PMI cost.
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