Is an FHA loan better than a conventional loan?
Neither is universally better. FHA can require less cash upfront and is often more flexible on credit, while conventional financing can cost less over time when your credit and down payment are strong because its mortgage insurance can be cancelled.
FHA · Written by Anil Aggarwal, Realtor® | Mortgage Loan Officer · Updated August 8, 2026
FHA charges an upfront mortgage insurance premium of 1.75% of the base loan amount, usually financed into the loan, plus an annual premium. When the original loan-to-value is above 90%, that annual premium generally lasts for the life of the loan.
Conventional PMI is priced from the mortgage insurer's rate card using your credit profile and loan-to-value, and it ends once you reach the required equity level. Strong credit can make conventional cheaper monthly; weaker credit can make FHA cheaper.
Eligibility and pricing are set by lender guidelines and your financial profile, so treat any comparison here as an estimate to discuss with a licensed mortgage professional.
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Educational only: The calculators and information on this website are for educational and illustrative purposes only. Results are estimates based on the information and assumptions entered and are not a loan offer, commitment to lend, financial advice or guarantee of eligibility, rates, costs or savings. Actual loan terms, rates, fees, mortgage insurance and qualification requirements vary by borrower, property, lender and loan program. Speak with a licensed mortgage professional for personalized information.