Deciding between government-backed and private financing? Our mortgage calculator fha vs conventional tool compares monthly payments, mortgage insurance costs (MIP vs. PMI), and total loan costs side-by-side to help you choose the best loan program.
FHA vs Conventional Comparison
mortgage calculator fha vs conventional Formula
The core amortization formula remains the same, but the principal amount and monthly insurance costs differ significantly between the two loan types.
Loan = (Price – Down) + 1.75% UFMIP
Monthly MIP = Base Loan * 0.55% / 12
Conventional:
Loan = Price – Down
Monthly PMI = Loan * (Credit Score Factor) / 12
Variables
- UFMIP: Upfront Mortgage Insurance Premium (FHA only, usually 1.75%).
- MIP: Annual Mortgage Insurance Premium (FHA, usually 0.55%).
- PMI: Private Mortgage Insurance (Conventional, varies by credit score).
Related Calculators
- FHA Loan Calculator
- Credit Score Impact Calculator
- First Time Home Buyer Tool
- Closing Cost Calculator
What is the Difference: FHA vs Conventional?
When using a mortgage calculator fha vs conventional, the biggest difference is often mortgage insurance. FHA loans require an upfront fee (UFMIP) added to your loan balance and a monthly premium (MIP) that lasts for the life of the loan if you put down less than 10%.
Conventional loans typically have no upfront insurance fee, and the monthly PMI automatically falls off once you reach 20% equity. However, Conventional PMI rates are highly sensitive to your credit score.
How to Calculate FHA vs Conventional (Example)
- Scenario: $300k home, 3.5% down ($10,500).
- FHA Calculation: Base Loan $289,500. Add 1.75% UFMIP ($5,066). Total Loan $294,566. Monthly MIP is roughly 0.55% annual.
- Conventional Calculation: Loan $289,500. No UFMIP. PMI rate depends on credit (e.g., 0.8% for 700 score).
- Comparison: Compare the total monthly payment and total loan cost over 5-10 years.
Frequently Asked Questions (FAQ)
It depends. For borrowers with lower credit scores (under 680), FHA is often cheaper monthly because FHA insurance rates don’t spike as much as Conventional PMI rates do for lower scores.
No. FHA requires 3.5% down. Conventional loans can go as low as 3% for first-time buyers, but usually require 5%.
On Conventional loans, yes, once you reach 20% equity. On FHA loans (with <10% down), the annual MIP stays for the life of the loan unless you refinance.
Upfront Mortgage Insurance Premium. It is a one-time fee of 1.75% of the loan amount charged on FHA loans, typically financed into the mortgage.