Loan programs
FHA vs Conventional Calculator: Compare Payments and Total Cost
Put the same home through both loan types and see which one costs less each month and over the years you plan to stay, with FHA mortgage insurance and conventional PMI both counted.
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FHA vs conventional
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In plain words
On a $350,000 home with 5% down, the FHA loan costs about $2,481 a month and the conventional loan about $2,468, before taxes and insurance. Over 7 years you would pay about $208,403 on FHA (including $5,819 of financed upfront MIP) and $207,347 on conventional.
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Key figures
- FHA monthly payment (P&I + MIP)$2,481
- Conventional monthly payment (P&I + PMI)$2,468
- FHA total paid over the period$208,403
- Conventional total paid over the period$207,347
- PMI ends (78%)Feb 2039
- FHA
- Conventional
View chart as table
| Year | FHA | Conventional |
|---|---|---|
| Year 1 | $29,801 | $29,621 |
| Year 2 | $29,785 | $29,621 |
| Year 3 | $29,768 | $29,621 |
| Year 4 | $29,750 | $29,621 |
| Year 5 | $29,730 | $29,621 |
| Year 6 | $29,708 | $29,621 |
| Year 7 | $29,685 | $29,621 |
| Year 8 | $29,661 | $29,621 |
| Year 9 | $29,634 | $29,621 |
| Year 10 | $29,605 | $29,621 |
Compare scenarios
| Scenario | Monthly payment | Upfront insurance | Total interest | Mortgage insurance total |
|---|---|---|---|---|
| FHA | $2,481 | $5,819 | $504,963 | $40,703 |
| Conventional | $2,468 | $0 | $496,279 | $24,439 |
| Difference: Conventional | −$13 | −$5,819 | −$8,685 | −$16,264 |
Year by year
| Year | FHA | Conventional | Conventional minus FHA |
|---|---|---|---|
| Year 1 | $29,801 | $29,621 | -$180 |
| Year 2 | $59,586 | $59,242 | -$344 |
| Year 3 | $89,354 | $88,863 | -$491 |
| Year 4 | $119,104 | $118,484 | -$620 |
| Year 5 | $148,833 | $148,105 | -$729 |
| Year 6 | $178,542 | $177,726 | -$816 |
| Year 7 | $208,227 | $207,347 | -$880 |
| Year 8 | $237,888 | $236,968 | -$920 |
| Year 9 | $267,522 | $266,589 | -$933 |
| Year 10 | $297,127 | $296,210 | -$917 |
How to use this calculator
- Enter the home price and your down payment percentage.
- Enter the FHA rate and the conventional rate you were quoted. They start at the national weekly average.
- Enter the PMI rate a lender quoted for the conventional loan.
- Choose the loan term and how many years you expect to keep the loan.
- Compare the monthly payments and the totals for the period, then check which loan is cheaper.
FHA and conventional loans are the two most common choices for buyers with a small down payment. Both let you put down far less than 20%, and both charge you for mortgage insurance. The difference is how they charge for it and for how long. This FHA vs conventional calculator runs the same home through both loans so you can see the gap in dollars, not just in rules.
How this FHA vs conventional calculator works
For the FHA side, the calculator takes the base loan (price minus down payment), adds the 1.75% upfront mortgage insurance premium (UFMIP) to the loan, and works out principal and interest on that larger amount. It then adds the annual MIP from HUD’s current table: for most 30-year loans up to $726,200, 0.55% a year with less than 5% down and 0.50% with 5% or more.
For the conventional side, it works out principal and interest on the base loan and adds PMI at the rate you enter, but only while the balance is above 80% of the price.
Both payments use the standard amortization formula:
M = P × r ÷ (1 − (1 + r)^−n)
P is the loan amount, r is the yearly rate ÷ 12 and n is the number of monthly payments. The total for the period adds up every payment over the years you choose, counting FHA MIP for 11 years or the life of the loan, and counting PMI only until the 80% month.
Worked examples
Example 1: good credit, 5% down, same rate
A buyer purchases a $350,000 home with 5% down on a 30-year loan. Assume both loans carry a 6.5% rate, the conventional PMI quote is 0.6% a year, and the buyer expects to keep the loan for 7 years.
- Base loan: $350,000 − $17,500 = $332,500.
- FHA: upfront MIP is $332,500 × 1.75% = $5,818.75, so the financed loan is $338,318.75. Principal and interest is about $2,138, and annual MIP at 0.50% adds about $139. Total: about $2,277 a month.
- Conventional: principal and interest on $332,500 is about $2,102, and PMI at 0.6% adds about $166. Total: about $2,268 a month.
- Over 7 years: about $191,263 on FHA and about $190,502 on conventional.
The loans are nearly tied here. But stretch the period to 15 years and the conventional loan wins by about $10,900, because PMI stops after about 124 payments (just over 10 years) while FHA MIP continues for the life of the loan.
Example 2: lower credit score, minimum down
Now assume a buyer with a lower score puts 3.5% down on the same home. A lender quotes an assumed 6.25% on FHA and 6.75% on conventional, with PMI at 1.2% a year.
- Base loan: $337,750. FHA upfront MIP: about $5,911, financed loan about $343,661.
- FHA: about $2,116 principal and interest plus about $155 MIP (0.55%) = about $2,271 a month.
- Conventional: about $2,191 principal and interest plus about $338 PMI = about $2,528 a month.
- Over 7 years: about $190,745 on FHA versus about $212,385 on conventional.
For this buyer, FHA saves roughly $257 a month. The difference comes from the rate and the PMI price, both of which depend on credit.
What your result means
Look at two things: the monthly gap and the total for your period. If the monthly payments are close, the loan with mortgage insurance that ends sooner usually wins over time. If FHA is clearly cheaper each month, it may still be the better start, and you can refinance into a conventional loan later once you have about 20% equity and a stronger score. A refinance has its own costs, so check the refinance break-even calculator before counting on it.
Program rules that change the answer
| Rule | FHA | Conventional |
|---|---|---|
| Minimum down | 3.5% with 580+ score; 10% with 500-579 | 3% on some programs, often 5% |
| Upfront insurance | 1.75% of the base loan | None |
| Annual insurance | 0.15% to 0.75% by term, loan size and LTV | PMI priced by credit and down payment |
| When insurance ends | 11 years with 10%+ down, otherwise life of loan | Cancel at 80% on request, automatic at 78% |
| 2026 loan limit (one unit) | County FHA limit, up to $1,249,125 | $832,750 baseline, up to $1,249,125 in high-cost areas |
| Who is eligible | US citizens and lawful permanent residents | Broader, under Fannie Mae and Freddie Mac rules |
The full rule-by-rule comparison is in our FHA vs conventional loan guide.
Assumptions
- Fixed rates on both loans for the whole term.
- FHA MIP follows HUD Mortgagee Letter 2023-05; the annual premium is shown at its first-year amount.
- The FHA upfront premium is financed, not paid in cash.
- PMI is a flat yearly percentage of the original loan and stops at the scheduled 80% month. In real life you must ask for cancellation at 80%; it ends automatically at 78%.
- Taxes, homeowners insurance, HOA dues and closing costs are left out, because they are about the same for both.
- The rate boxes start at the latest national weekly average, which is for conventional loans and is not a quote.
Common mistakes
- Using the same rate for both loans. FHA and conventional rates are priced differently. Get a quote for each.
- Guessing PMI. PMI can be several times higher for a 640 score than for a 760 score. A real quote changes the answer more than any other input.
- Comparing only the first month. The cheaper loan in month one is not always cheaper over 10 years.
- Forgetting the upfront premium. It raises the FHA balance from day one.
Limits of this estimate
Lenders also add their own price adjustments, may require reserves, and may cap your debt-to-income ratio differently on each program. Ask at least two lenders for a Loan Estimate on both loan types and compare them line by line. To see each part of the FHA insurance cost, use the FHA MIP calculator; for a full monthly budget with taxes and insurance, use the mortgage payment calculator. A HUD-approved housing counselor can walk you through the choice for free or at low cost.
For context, the national average 30-year fixed rate was 7.40% as of October 15, 2026 (Freddie Mac). FHA, VA and USDA rates are set by each lender and often differ.Source: Freddie Mac Primary Mortgage Market Survey, via FRED
Frequently asked questions
Is FHA or conventional cheaper?
It depends mostly on your credit score and down payment. With strong credit and 5% or more down, a conventional loan is often cheaper, because PMI is priced low and can be removed. With a lower score, FHA is often cheaper because its premiums do not rise for weaker credit.
Why does the FHA loan amount look higher?
Most FHA borrowers finance the 1.75% upfront mortgage insurance premium. The calculator adds it to the loan, so the FHA principal and interest payment is a little higher than it would be on the same base loan.
When does PMI stop on the conventional loan?
You can ask to cancel PMI when the balance reaches 80% of the original value, and it ends automatically at 78% or at the loan's midpoint. The calculator stops counting PMI at the 80% month.
Does FHA mortgage insurance ever go away?
With 10% or more down, FHA's annual premium ends after 11 years. With less than 10% down, it lasts for the life of the loan unless you refinance into a loan without FHA insurance.
Why does the number of years matter so much?
FHA's premium usually continues while conventional PMI drops off after several years. Over a short period the two loans can be close; over a long period the conventional loan often pulls ahead once PMI ends.
Does this include property taxes and homeowners insurance?
No. Taxes and insurance would be about the same on either loan, so they are left out to keep the comparison clean. Add them with the mortgage payment calculator for your full budget.
Can I get an FHA loan if I am not a permanent resident?
Not under current HUD policy. Mortgagee Letter 2025-09 removed non-permanent residents from FHA eligibility for case numbers assigned on or after May 25, 2025. A conventional loan may still be possible under Fannie Mae and Freddie Mac rules.
Sources
Read the guides
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