FHA vs conventional at a glance
| FHA | Conventional | |
|---|---|---|
| Min. down | 3.5% | 3% |
| Min. credit | 580 | 620 |
| Mortgage insurance | 1.75% upfront + ~0.55%/yr | ~0.3%–1.5%/yr, no upfront |
| Removable? | Only with 10%+ down (after 11 yrs) | Yes, at 20% equity |
| Max DTI | ~50% with factors | ~45%–50% |
| Property | Primary only; stricter appraisal | Primary, second home, investment |
Example: monthly cost comparison
On a $300,000 home with 5% down and a 700 credit score, a conventional loan's PMI might be around $100/month, while FHA MIP could be around $130/month plus the upfront premium added to the balance. With a 640 score, conventional PMI can rise above $200/month, making FHA cheaper.
Frequently asked questions
Yes. Many homeowners refinance into a conventional loan once they reach 20% equity and better credit to drop mortgage insurance.
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Figures on this page are estimates for educational purposes only and are not a loan offer or commitment to lend. Rates, loan limits, fees and assistance programs change frequently and vary by lender, location and borrower profile. Confirm current terms with a licensed loan officer.