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Conventional vs Conventional: Real Costs

March 28, 2026 · 5 min read · By Vatche Saatdjian

Everyone says "Conventional is cheaper" or "conventional is better long-term." But nobody shows the actual math. Let us run the numbers on a $435,000 Las Vegas home.

The Setup

Buyer: 660 credit score, $20,000 saved, buying $435K home.

Conventional option: 5-20% down ($15,225), 5.750% rate, $192/mo PMI forever.

Conventional option: 5% down ($21,750), 6.375% rate, $245/mo PMI until 20% equity (~7 years).

Year 1-5: conventional Wins

Conventional monthly: $2,683. Conventional monthly: $2,891. conventional saves $208/month or $12,480 over 5 years. Plus you kept $6,525 more cash at closing.

Year 5-10: It Flips

At year 7, conventional PMI drops. Now conventional is $2,646/mo vs conventional still at $2,683. But conventional was cheaper for 7 years. Net advantage still conventional through year 10.

The Smart Play

Buy with conventional now (lower payment, less cash needed), build equity, then refinance to conventional at 20% equity to drop PMI. Best of both worlds. See the full comparison →

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