Use MoneyGeek's FHA vs. conventional loan calculator to compare mortgage costs for your home purchase. Enter your details to get estimates for both loan types.
FHA Loan vs. Conventional Loan Calculator
Updated: September 9, 2026
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FHA Loan vs. Conventional Loan Calculator
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How to Use a Mortgage Calculator for FHA vs. Conventional Loans
Home Price | The home's purchase price, which sets your total loan amount. |
Down Payment | Your down payment sets the loan-to-value ratio, which affects approval odds, interest rates and whether mortgage insurance is required. |
Estimated Mortgage Payment | Your loan amount and rate together determine monthly payments and total interest over the life of the loan. |
Credit Score | Lenders use your credit score to assess risk. It has a direct effect on the interest rate you qualify for on both FHA and conventional loans. |
FHA Loan Rate | The rate used to calculate FHA loan costs, including monthly payments and total loan cost over the term. |
Conventional Loan Rate | The rate used to calculate conventional loan costs. Comparing this against the FHA rate shows which option costs less overall. |
After entering your details, the calculator returns these outputs:
Monthly Payment (For the First Year) | Your starting monthly mortgage cost for each loan type, so you can see which one is lower from day one. |
Upfront Costs | All initial fees required to close, including closing costs, compared side by side for both loan types. |
Total 30-Year Cost | The full cost of each loan over its 30-year term. Use this to see which loan costs less over the full term. |
Total 5-Year Cost | The cost of each loan over five years, useful if you're planning to refinance or sell before the full term. |
Monthly Mortgage Insurance (First Year) | The mortgage insurance cost for each loan type in year one. Mortgage insurance costs vary between loan types and will affect your monthly payment. |
Down Payment | The actual cash amount required at closing for each loan type, based on the down payment percentage each program requires. |
Each line item shows which loan option costs less. The summary at the bottom tells you which loan type is cheaper overall.
FHA vs. Conventional Loans: What’s the Difference?
FHA loans allow down payments as low as 3.5% and are easier to qualify for if your credit score is lower. Conventional loans have stricter credit requirements, but you can cancel mortgage insurance once you reach 20% equity.
FHA is the right call if you have limited savings or a low credit score. Go with conventional if your credit is strong and you want to stop paying mortgage insurance sooner.
FHA Loans | Comparison Area | Conventional Loans |
|---|---|---|
Government-backed loans with low down payments that are easier to qualify for | Definition | Private loans with stricter credit score requirements |
As low as 3.5% of the home price | Down payment | Ranges from 3% to 20% of the home price |
Minimum 500 with 10% down; 580 for 3.5% down | Credit score requirement | Minimum score of 500 with 10% down; 580 for 3.5% down |
Required for the life of the loan if you put down less than 10% | Mortgage insurance | Required until you owe less than 80% of your home's value |
$498,257 for low-cost areas; $1,149,825 for high-cost areas (2024) | Loan limits (for one-unit properties) | $766,550 for most areas; $1,149,825 for high-cost areas (2024) |
FHA vs. Conventional Loan Rates
FHA and conventional loan rates differ by lender, so compare both before you decide. Your rate depends on your credit score, down payment and where you're buying:
Data filtered by:
Alabama
| 15-Year Fixed Rate FHA | 7.98% |
| Fixed15Year | 5.83% |
| 30-Year Fixed Rate FHA | 7.83% |
| Fixed30Year | 6.43% |
How the FHA vs. Conventional Loan Calculator Can Help
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 fair credit, and she hasn't saved enough for a 20% down payment. With homes under $500,000 in mind, she needs a loan that works with what she has now.
WHICH IS THE BETTER OPTION?
For Sarah, an FHA loan is the right call. FHA loans work well for borrowers with fair credit and allow a 3.5% minimum down payment, 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 added insurance costs, FHA's lower credit requirements and smaller down payment get Sarah into a home she can afford.
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. His monthly debt payments stay 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?
A conventional loan is the right call for Daniel. His high credit score qualifies him for a lower rate, and putting down 20% eliminates private mortgage insurance, a cost he'd carry with an FHA loan.
Mortgage Options: Beyond Conventional and FHA Loans
Laura is a retired Navy officer in Rhode Island buying a home near family. Her retirement savings are solid, but she doesn't want to put down a large down payment. As a veteran, she qualifies for a VA home loan through the Department of Veterans Affairs, a program built to help veterans get affordable home financing.
WHICH IS THE BETTER OPTION?
For Laura, neither FHA nor conventional loans match what she qualifies for as a veteran. VA loans require zero down payment and no private mortgage insurance. That cuts two of the highest costs she'd face with either loan.
She also gets easier credit requirements and foreclosure protections that reduce her financial risk. The VA loan is her best option, keeping her out-of-pocket costs low while putting her benefits to work.
FAQ: FHA vs. Conventional Loans
FHA and conventional loans differ in credit requirements, down payment rules and mortgage insurance.
The main differences between FHA and conventional loans come down to requirements and backing. FHA loans are government-backed and have lower credit score and down payment requirements. Conventional loans are privately backed and require higher credit scores and larger down payments.
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 require higher credit scores and larger down payments.
Mortgage insurance works differently for 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 20% equity in your home.
You can switch from an FHA loan to a conventional loan by refinancing. This is a common move once you've built enough equity and your credit has improved.
If your credit score is strong, conventional loans offer clear advantages. You'll qualify for a lower interest rate, a 20% down payment eliminates PMI entirely, and loan terms are more flexible than what FHA loans allow.
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About Zachary Romeo, CBCA
Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA) and the former 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.
Zachary 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 Agency. "FHFA Announces Conforming Loan Limit Values for 2024." Accessed September 9, 2026.
- U.S. Department of Housing and Urban Development. "FHA Announces 2024 Loan Limits, Empowering Homebuyers Amidst Rising Home Prices." Accessed September 9, 2026.