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: May 8, 2026
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How to Use a Mortgage Calculator for FHA vs. Conventional Loans
Home Price | The property's appraised value. This is the baseline for your loan calculation and determines the overall 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 the life of the term. This is the most direct long-term comparison between FHA and conventional. |
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. This can be a deciding factor for borrowers comparing monthly budgets. |
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 highlights which loan option costs less. The calculator also returns a summary identifying the more cost-effective loan type based on your full inputs.
FHA vs. Conventional Loans: What’s the Difference?
FHA loans accept down payments as low as 3.5% and qualify borrowers with lower credit scores. Conventional loans require stronger credit but give you more control over mortgage insurance. FHA is the better fit for borrowers with limited savings or credit challenges.
Conventional is better if your credit is strong and you want to avoid long-term mortgage insurance costs. 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 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:
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
The examples show how different financial profiles affect which loan type comes out ahead:
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?
The calculator shows a conventional loan is the better option for Daniel. His high credit score qualifies him for competitive rates, and his 20% down payment eliminates private mortgage insurance (a cost he'd carry with an FHA loan). The conventional loan's lower long-term costs align with his credit profile and available savings.
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 may qualify for a VA home loan through the Department of Veterans Affairs, a program built specifically to help veterans access 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
FHA and conventional loans differ on credit requirements, down payment rules and mortgage insurance. These questions cover the key differences:
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 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 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 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.