Discover the most cost-effective mortgage loan option for your home purchase with our FHA loan vs. conventional loan calculator. Enter these information in the mortgage calculator and get estimates that could guide your decision-making process.
FHA Loan vs. Conventional Loan Calculator
Updated: September 29, 2025
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FHA Loan vs. Conventional Loan Calculator
Compare both FHA and conventional mortgage programs to get proper understanding of your situation
Basic Details
Some basic details about the property and loanEnter the property's fair market value, or the price you expect to pay for the home.
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Your down payment is the initial cash amount due from you that you pay at closing. It is expressed as a percentage of the purchase price or home value. The amount your lender may require as a down payment can vary dramatically, depending on the type of loan you have, the value of the home and your credit score. The default down payment percentage of 20% is the most common.
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The length of the loan repayment period, typically 30 or 15 years
Enter your best guess if you do not know your FICO credit score:
- Exceptional: 800 - 850
- Very Good: 740 - 799
- Good: 670 - 739
- Fair: 580 - 669
- Poor: 300 - 579
Interest Rate
Interest is the amount your lender charges for loaning you money. The interest is stated as a percentage of the total loan value. The default interest rate is based on today's rate for a 30-year fixed term loan, which is one of the most common types of mortgages.
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Calculation Results
| Financial Analysis | FHA | Conventional | Difference |
|---|---|---|---|
| Monthly Payment (First Year) | FHA$0 | Conventional$0 | Difference$0 |
| Upfront Costs | FHA$0 | Conventional$0 | Difference$0 |
| Total 30-Year Cost | FHA$0 | Conventional$0 | Difference$0 |
| Total 5-Year Cost | FHA$0 | Conventional$0 | Difference$0 |
| Monthly Mortgage Insurance (First Year) | FHA$0 | Conventional$0 | Difference$0 |
| Down Payment | FHA$0 | Conventional$0 | Difference$0 |
| Calculator results are rounded to the nearest whole dollar. | |||
How to Use a Mortgage Calculator for FHA vs. Conventional Loans
Home Price | Refers to the property's value, typically determined through a home appraisal, which serves as the baseline for your loan calculation and influences the overall loan amount and required financing. |
Down Payment | Influences your loan-to-value ratio, which can affect loan approval, interest rates and whether mortgage insurance is required. |
Estimated Mortgage Payment | Affects your monthly payments and total interest over the life of the loan, helping you plan long-term financial commitments. |
Credit Score | Used to assess your creditworthiness, directly affecting your interest rates on both FHA and conventional loans. |
FHA Loan Rate | Essential for calculating the specific costs associated with an FHA loan, including your monthly payments and total loan cost. |
Conventional Loan Rate | Key for comparing costs against FHA loans, impacting your decision on the most economical loan option. |
Once you’ve put in all the required information, here’s what you’ll get:
Monthly Payment (For the First Year) | Shows your initial monthly mortgage expenses, helping you budget effectively and see which loan offers lower initial payments. |
Upfront Costs | Lists all initial fees and costs involved in securing the loan, including closing costs, to compare total initial expenditures for both loan types. |
Total 30-Year Cost | Provides the cumulative cost over the life of the loan, allowing for a long-term financial comparison between FHA and conventional options. |
Total 5-Year Cost | Focuses on the short-term financial impact, which is crucial for those considering refinancing or selling within a few years. |
Monthly Mortgage Insurance (First Year) | Indicates the cost of mortgage insurance required for each loan type, which can significantly affect your monthly budget. |
Down Payment | Displays the actual cash needed at closing, highlighting differences due to loan type requirements on down payment percentages. |
Based on your input, each line item will be highlighted to show which loan option is more affordable. The FHA vs. conventional loan calculator also provides a summary that indicates the more suitable loan type overall.
FHA vs. Conventional Loans: What’s the Difference?
FHA loans let you put down as little as 3.5% and accept lower credit scores, while conventional loans typically require higher credit scores but offer more flexibility on mortgage insurance. FHA loans work well if you have limited savings or credit issues, while conventional loans are better if you have good credit and want to avoid lifelong mortgage insurance.
Here's how they compare:
FHA Loans | Comparison Area | Conventional Loans |
|---|---|---|
Government-backed loans with low down payments that are easier to qualify for. | Definition | Privately backed loans that typically require higher credit scores. |
As low as 3.5% of the home purchase price. | Down Payment | Usually 3% to 20% of the home price. |
Minimum 500 with 10% down; 580 for 3.5% down. | Credit Score Requirement | Minimum score of 620. |
Required for the life of the loan if you put down less than 10%. | Paying Mortgage Insurance | Required until you owe less than 80% of your home's value. |
2024 FHA loan limits are $498,257 for low-cost areas and $1,149,825 for high-cost areas. | Loan Limits (for one-unit properties) | 2024 loan limits are $766,550 for most areas and $1,149,825 for high-cost areas. |
FHA vs. Conventional Loan Rates
FHA and conventional loan rates can vary, so comparing them helps you find the cheapest option for your situation. The rates you'll actually get depend on your credit score, down payment and where you're buying:
Data filtered by:Results filtered by:
Select
State:Alabama
| 15-Year Fixed Rate FHA | 7.98% |
| 30-Year Fixed Rate FHA | 7.83% |
| Fixed15Year | 5.83% |
| Fixed30Year | 6.43% |
How the FHA vs. Conventional Loan Calculator Can Help
Using an FHA vs. conventional loan calculator can help you determine the most beneficial mortgage for your financial situation. Explore our scenarios next to see how different inputs can lead to various optimal mortgage solutions.
When an FHA Loan Makes Sense for First-Time Buyers
Sarah's a young professional ready to buy her first home. She has steady income but only fair credit, which limits her mortgage options. She's saved for a down payment but doesn't have enough for 20% down. She's looking at homes under $500,000 and needs financing that works with her current financial situation.
WHICH IS THE BETTER OPTION?
The conventional vs. FHA loan calculator shows that an FHA loan is Sarah's best bet. FHA loans work well for borrowers with fair credit and let you put down just 3.5%, which matches what she's saved. The downside? She'll pay mortgage insurance premiums (MIP) that stick around for the life of the loan unless she refinances later.
Even with the extra insurance costs, the FHA loan's lower credit requirements and smaller down payment make homeownership possible for Sarah. It balances her financial limits with her goal of buying her first home.
When a Conventional Loan Is the Smart Choice
Daniel's a senior software engineer in Seattle with steady income and strong finances. His credit score is in the high 700s with excellent payment history. He keeps his monthly debt well below 40% of his income. After years of saving, he's ready to put down at least 20% on a $650,000 home, which means he'll avoid mortgage insurance entirely.
WHICH IS THE BETTER OPTION?
Using the FHA vs. conventional loan calculator, a conventional loan is Daniel's clear winner. His high credit score gets him competitive interest rates, and his 20% down payment means no private mortgage insurance (PMI), something he'd have to pay with an FHA loan. The conventional loan's lower long-term costs work perfectly with his strong credit and substantial down payment.
Daniel's using his excellent credit history and savings to minimize extra costs and lock in favorable terms. For someone in his financial position, a conventional loan is the most cost-effective choice.
Navigating Mortgage Options: Beyond Conventional and FHA Loans
Laura's a retired Navy officer living in Rhode Island who wants to buy a home close to family. She's financially secure with good retirement savings but doesn't want to put down a huge down payment. As a veteran, she knows she might qualify for a VA home loan through the Department of Veterans Affairs, a program designed specifically to help veterans with affordable home financing.
WHICH IS THE BETTER OPTION?
After comparing FHA and conventional loans, Laura realizes neither can beat what she gets as a veteran. VA loans require zero down payment and no private mortgage insurance. That's money she keeps in her pocket both upfront and every month.
As a veteran, Laura also gets easier credit requirements and extra foreclosure protections that make the loan both affordable and secure. For her situation, the VA loan is the clear winner, letting her use her veteran benefits while avoiding high out-of-pocket costs.
FAQ: FHA vs. Conventional Loans
Choosing between FHA and conventional loans can be confusing' they each have different credit requirements, down payment rules and mortgage insurance policies. These common questions cover the key differences and help you figure out which loan type works better for your situation.
What are the main differences between FHA and conventional loans?
The main differences between FHA and conventional loans come down to requirements and backing. FHA loans are government-backed with easier credit and down payment requirements, great for first-time buyers. Conventional loans are privately backed and typically want higher credit scores and bigger down payments.
Is it easier to qualify for an FHA loan than a conventional loan?
Yes, it's easier to qualify for an FHA loan than a conventional loan. FHA loans accept lower credit scores and smaller down payments, while conventional loans generally want higher credit scores and more financial stability.
How does mortgage insurance differ between FHA and conventional loans?
Mortgage insurance works differently between FHA and conventional loans. FHA loans require mortgage insurance (MIP) for the life of the loan if you put down less than 10%. Conventional loans only require private mortgage insurance (PMI) if you put down less than 20%, and you can remove PMI once you reach 22% equity in your home.
Can I switch from an FHA loan to a conventional loan in the future?
You can switch from an FHA loan to a conventional loan by refinancing. People often do this to eliminate mortgage insurance once they have enough home equity and their credit score improves.
Are there specific benefits of a conventional loan for high-credit borrowers?
High-credit borrowers get several benefits with conventional loans. You'll likely qualify for lower interest rates, avoid PMI entirely with a 20% down payment and get more flexible loan terms than what FHA loans offer.
About Zachary Romeo, CBCA
Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.
Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.
sources
- Federal Housing Finance Authority. "FHFA Announces Conforming Loan Limit Values for 2024." Accessed February 4, 2025.
- U.S. Department of Housing and Urban Development. "FHA Announces 2024 Loan Limits, Empowering Homebuyers Amidst Rising Home Prices." Accessed February 4, 2025.