Broker DaveFHA vs. conventional calculator
FHA usually wins month one. Conventional usually wins year seven. Which one is right depends on your credit score, your down payment and how long you'll keep the loan — so this compares both on the same house, with each program's real mortgage insurance rules, and tells you where the crossover lands.
The purchase
30 yrs — 360 is a 30-year note, 180 a 15-year.
FHA needs 3.5% down at this score and prices MIP identically regardless of it. Conventional PMI moves hard on credit — that's the whole comparison.
FHA side
$14,000 down · 96.50% LTV
FHA usually quotes below conventional at the same credit score — that discount is half of why anyone takes the MIP.
Conventional side
$20,000 down · 95.00% LTV
90.01% – 95% LTV. 30% is the agency standard; the lower options trade premium for a hit to your note rate.
Shared costs
Almost nobody keeps a 30-year loan 30 years. The honest comparison is over the years you'll actually hold it.
FHA is $86/mo cheaper today ($3,161 vs $3,247) — but that gap moves when the mortgage insurance does.
Side by side
| FHA | Conventional | |
|---|---|---|
| Down payment | $14,000 | $20,000 |
| LTV | 96.50% | 95.00% |
| Note rate | 6.25% | 6.625% |
| Upfront MI | $6,755 | None |
| Loan amount | $392,755 | $380,000 |
| Cash to close | $14,000 | $20,000 |
| Principal & interest | $2,418.26 | $2,433.18 |
| Taxes, insurance & HOA | $566.67 | $566.67 |
| Monthly MI | $175.80 | $247.00 |
| Total payment | $3,160.73 | $3,246.85 |
| MI rate | 0.55% | 0.78% |
| MI stops | Never | 11 yrs 5 mos |
| Payment once MI ends | — | $2,999.85 |
| Lifetime mortgage insurance | $47,903 | $33,839 |
| Paid in over 7 yrs (incl. cash to close) | $278,899 | $292,735 |
| Equity at 7 yrs | $46,389 | $55,708 |
| Net cost over 7 yrs | $232,511 | $237,028 |
Net cost is everything you put in — down payment, unfinanced fees, every payment, escrows and mortgage insurance — minus the equity you own at the end. It's the only way to compare a bigger down payment against a smaller one without pretending the extra cash vanished.
Why the mortgage insurance differs
- FHA — upfront MIP
- 1.75% · $6,755
- FHA — annual MIP
- 0.55% for life of the loan
- Conventional — upfront
- Nothing
- Conventional — PMI rate
- 0.78% · 30% coverage · 700–719
- Conventional — you can ask to cancel at 80%
- 10 yrs 5 mos in
The structural difference: conventional PMI is a level premium on the original loan amount that the servicer must drop at 78% of the purchase price — and that you can ask to cancel at 80%. FHA MIP above 90% LTV never cancels; it runs the full term, and the only exits are a refinance or a sale. That is why FHA can win on month one and still lose over seven years.
FHA figures follow HUD Handbook 4000.1 Appendix 1.0 (Mortgagee Letter 2023-05), including HUD's average-balance premium formula. PMI is priced off Essent Guaranty's published BPMI monthly card effective February 11, 2019.
Both amortization schedules
Year by year, both loans side by side, with each program's mortgage insurance in its own column.
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The three things that decide it
Your credit score
FHA prices mortgage insurance on LTV and term only — a 620 score and a 780 score pay the identical MIP. Conventional PMI triples across that same range. Below roughly 680, FHA usually wins outright; above 740, conventional usually does.
How long you'll keep it
FHA's MIP above 90% LTV never cancels. Conventional PMI comes off at 78% — typically somewhere around year nine on a 5%-down purchase. Sell or refinance before then and FHA's lower rate may never get punished for it.
The rate gap
FHA usually quotes below conventional at the same score, and that discount is the entire reason anyone accepts the MIP. Put a real quote in both rate fields — a made-up gap is the fastest way to make this comparison lie.
How the two sides are calculated
- FHA — 1.75% upfront MIP on the base loan, annual MIP from HUD Handbook 4000.1 Appendix 1.0 (Mortgagee Letter 2023-05), computed HUD's way: the average scheduled balance for each year, divided by 1.0175 when the upfront premium was financed, then by twelve.
- Conventional — no upfront fee, and PMI priced off Essent Guaranty's published BPMI monthly rate card by credit band, LTV band and coverage level, level on the original loan amount, terminating at the Homeowners Protection Act's 78% point.
- Net cost — everything you put in over the hold period, including cash to close, minus the equity you own at the end. Comparing raw payments alone punishes the larger down payment for money that's still yours.
- What's left out — closing costs beyond the financed fees, seller credits, FHA and conforming loan limits, and the loan-level price adjustments that move a real conventional rate quote. Those belong on a Loan Estimate.
Broker Dave is not affiliated with Essent Guaranty, Inc., HUD, or the FHA. This calculator is educational and is not a loan offer, a rate quote, or a commitment to lend. Every figure is an estimate. David Lurvey, NMLS 410420.