FHA vs Conventional Calculator
FHA and conventional loans price mortgage insurance completely differently, and that — not the interest rate — is usually what decides which is cheaper for you. Compare both on the same home with your credit range.
Your numbers
The credit range in the loan section changes conventional mortgage insurance pricing. FHA premiums do not vary with credit score.
Line by line
| FHA | Conventional | |
|---|---|---|
| Down payment | $21,000 (3.5%) | $30,000 (5%) |
| Loan amount | $589,133 | $570,000 |
| Financed upfront premium | $10,133 | None |
| Cash needed at closing | $39,000 | $48,000 |
| Principal & interest | $3,724 | $3,603 |
| Monthly mortgage insurance | $270 | $242 |
| Mortgage insurance lasts | 30 yr | 11 yr 3 mo |
| Total monthly payment | $5,244 | $5,095 |
| Mortgage insurance paid in total | $97,207 | $32,704 |
| Interest over the full term | $751,406 | $727,004 |
| All-in cost through 5 years | $383,624 | $383,702 |
| All-in cost through 10 years | $728,248 | $719,405 |
What this says
At these settings, FHA's monthly payment is +$149 versus conventional, and through 10 years the all-in difference is +$8,844 in favor of conventional.
FHA finances a 1.75% upfront premium ($10,133 here) and, above 90% loan-to-value, keeps the annual premium for the life of the loan. Conventional PMI ends once you reach the required equity, which is why stronger credit and a larger down payment tend to favor conventional.
Eligibility for either program depends on underwriting, the property and your full financial profile. Neither program is universally cheaper.
Assumptions behind these numbers
- FHA charges a 1.75% upfront premium on the base loan amount plus an annual premium. For terms over 15 years and base loan amounts at or below $726,200, the annual premium is 0.50% up to 95% LTV and 0.55% above 95% LTV. Annual premiums run for 11 years when the original loan-to-value is 90% or less, otherwise for the life of the loan.
- PMI applies to conventional loans above 80% loan-to-value. The premium depends on the mortgage insurer's rate card, your credit profile, loan term and coverage requirements, so the factors used here are illustrative estimates. Under the Homeowners Protection Act, PMI on a primary residence generally must be terminated when the scheduled balance reaches 78% of the original value.
- Property taxes, homeowners insurance, HOA dues and maintenance are estimates you can change; actual amounts vary by property and municipality.
- Home appreciation, rent growth and investment returns are assumptions, not predictions. Real markets move up and down.
- Mortgage insurance figures are estimates. Actual pricing depends on the lender, the mortgage insurer and your credit profile.
- Results ignore income tax effects, such as any deduction for mortgage interest or property taxes.
- Interest rates shown are averages or your own entries, not a rate quote or lock.
Keep going
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.