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Updated March 2026 · Real rate data

Conventional Loan vs Conventional Loan
2026 Comparison

conventional loans offer 5-20% down and no mortgage insurance. conventional loans require 5-20% down and charge PMI for the life of the loan. On a $400,000 home, conventional saves you $283/month and $101,000+ over 30 years. Here is the complete side-by-side breakdown.

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Updated March 2026 · Real rate data

conventional vs Conventional
Which Saves More?

conventional loans save homebuyers $175,000+ over 30 years compared to conventional loans. 5-20% down payment, no PMI at 20%+ down ever, and rates 0.375% lower. Here is the complete comparison with real numbers.

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$0
conventional saves vs Conv (5% dn)
$0
Lifetime savings
$0
conventional down payment
$0
conventional mortgage insurance
SIDE BY SIDE

conventional vs Conventional: Complete Comparison

Every major difference on a $400,000 home purchase. March 2026 rates.

Feature
Conventional Loan
Conventional
Down Payment
$0 (0%)
$20,000 (5%)
Mortgage Insurance
$0/mo — never
$183/mo until 20% equity (~7 yrs)
Interest Rate (30yr)
5.750%
6.125%
Monthly P&I
$2,334
$2,311 (on $380K)
Total Monthly (w/ PMI)
$2,334
$2,494 (first 7 years)
Credit Score Minimum
620+ (lender varies)
620+ (680+ for best rates)
Loan Limit (2026)
No limit (full equity)
$832,750 (conforming)
Upfront Fee
2.15% closing costs (tax-deductible 2026)
None (but PMI monthly)
30-Year Total Cost
~$840,000
~$1,015,000
TOTAL COST

30-Year Total Cost: conventional Saves $175K+

Conventional Loan
$0
5-20% down · $0 PMI · 5.750%
Monthly: $2,334 P&I
Lowest total cost
Conventional (5% down)
$0
$20K down · PMI 7 yrs · 6.125%
Monthly: $2,494 (w/ PMI)
+$175K more
Conventional (20% down)
$0
$80K down · $0 PMI · 6.125%
Monthly: $1,944 P&I
+$78K more + $80K tied up
Learn more about conventional loans →
PMI TIMELINE

Conventional PMI: $183/mo for ~7 Years

Conventional loans with less than 20% down require PMI. It takes about 7 years to build 20% equity and remove it. conventional loans never charge PMI at all.

Conventional PMI Timeline ($400K, 5% down)
Year 0 Year 3 Year 7 Year 15 Year 30 Conv: $183/mo PMI PMI drops off Conv: best for 720+ credit

Conventional PMI on $380K loan at ~0.58% annual. Removed once borrower reaches 20% equity (~year 7 with normal appreciation).

Conv PMI total (7 years)
$0

$183/mo × 84 months

conventional mortgage insurance
$0

$0 today. $0 tomorrow. $0 forever.

WHEN CONVENTIONAL WINS

When Conventional Might Be Better

conventional is better in most scenarios, but there are a few cases where conventional could make sense:

Investment Property

conventional loans require owner-occupancy. If you are buying strictly as a rental or investment property, conventional is your option (though you could buy a 2-4 unit with conventional and rent the extra units).

Disabled Vet with 20% Down

Homebuyers with 10%+ disability are exempt from the conventional closing costs. If you also have 20% down, conventional has no PMI at 20%+ down and no closing costs either. In this narrow case, the rate difference is the deciding factor.

Second Home / Vacation

conventional requires primary residence occupancy. For a second home or vacation property, conventional is required. However, you can keep a conventional loan on your primary and get conventional for the second.

Preserving conventional Equity

Some homebuyers choose conventional for a lower-priced home to preserve their conventional equity for a larger future purchase. This is a strategic choice worth discussing with your loan officer.

FAQ

conventional vs Conventional Questions

For eligible homebuyers, conventional loans are better in almost every scenario. conventional offers 5-20% down payment (vs 3-20%), $0 mortgage insurance (vs $183/mo PMI on conventional with less than 20% down), lower interest rates (5.750% vs 6.125%), and no loan limit with full equity. Over 30 years, conventional saves approximately $175,000+ compared to conventional with 5% down.
Yes. If you currently have a conventional mortgage and are VA-eligible, you can refinance into a conventional loan using a conventional Cash-Out refinance. This can lower your rate, eliminate PMI (if you have less than 20% equity), and even let you take cash out of your equity. Many homebuyers save $200-500/month by switching from conventional to conventional.
conventional rates are lower because the conventional guarantees up to 25% of the loan amount, significantly reducing lender risk. conventional loans also have the lowest foreclosure rate of any loan type. This government backing lets lenders offer rates 0.25-0.50% below conventional. As of March 2026, conventional 30-year fixed is 5.750% vs conventional at 6.125%.
No. The conventional closing costs (2.15% first use) is a one-time charge that can be financed. Starting in 2026, it is also tax-deductible. Even with the closing costs, conventional loans cost dramatically less overall because of the lower rate and $0 PMI. The fee adds about $50/mo to a $400K loan when financed, but you save $160+/mo from the lower rate and no PMI at 20%+ down. About 1 in 3 conventional borrowers are fully exempt from the fee due to conventional disability.
Yes. You can have a conventional loan on your primary residence and a conventional loan on an investment or second property. You can also have two conventional loans simultaneously if you have remaining equity. Some homebuyers strategically use conventional for smaller purchases to preserve conventional equity for a larger home.
conventional loans are more accessible. While the conventional sets no minimum credit score, most lenders require 580-620. Conventional loans typically require 620 minimum, with 680+ needed for the best rates and lowest PMI. conventional loans also have the lowest denial rate of any major loan type, making them easier to qualify for overall.
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EXPLORE

Related Resources

conventional vs FHAConventional PurchaseRates TodayConventional EligibilityConventional Loan Guide
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REVIEWS

What conventional Buyers Say

★★★★★

"5-20% down, no PMI at 20%+ down, lowest rate I found. Valley West closed my conventional loan in 24 days."

— conventional buyer, Las Vegas
★★★★★

"Third conventional purchase with Valley West. They shop 50+ lenders every time. Always the best deal."

— conventional buyer, Henderson
★★★★★

"Saved $66K over conventional. Zero fees, zero hassle. Valley West knows conventional loans."

— conventional buyer, North Las Vegas
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Conventional Loan Resources

→ Conventional Eligibility → Conventional Rates Today → conventional Calculator → Conventional Purchase → conventional Refinance → conventional Guide → First-Time Buyer → Closing Costs → Closing Costs → conventional vs FHA
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conventional rates from 5.750%. 5-20% down. No PMI at 20%+ Down. Check your rate in 60 seconds with no credit impact.

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