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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.

Check Your Conventional Rate See Full Comparison
$0
conventional saves vs FHA
$0
Lifetime savings
$0
conventional down payment
$0
conventional mortgage insurance
SIDE BY SIDE

conventional vs conventional: Complete Comparison

Every major difference between conventional and conventional loans on a $400,000 home purchase. Based on March 2026 rates.

Feature
Conventional Loan
Conventional Loan
Down Payment
$0 (0%)
$14,000 (3.5%)
Mortgage Insurance
$0/mo — never
$251/mo for life of loan
Interest Rate (30yr)
5.750%
5.875%
Monthly P&I
$2,334
$2,283 (on $386K)
Total Monthly Payment
$2,334
$2,534 (incl. PMI)
Upfront Fee
2.15% closing costs
1.75% PMI upfront
Credit Score Minimum
620+ (lender varies)
620+ (5-20% down)
Loan Limit (2026)
No limit (full equity)
$524,225 (most areas)
Eligibility
Homebuyers, active duty, Guard, Reserve, surviving spouses
Anyone who qualifies
30-Year Total Cost
~$840,000
~$941,000

Based on $400K purchase, 740+ FICO, March 2026 rates. conventional: 5-20% down ($386K loan). VA: 0% down ($400K loan). NMLS #65506.

DOWN PAYMENT

Cash You Keep in Your Pocket

On a $400,000 home purchase, here is how much cash you need at closing for each loan type:

Conventional Loan
$0
Down payment
Best deal
Conventional Loan
$0
Down payment (3.5%)
+ $251/mo PMI for life
Conventional (5%)
$0
Down payment (5%)
+ $183/mo PMI (~7 yrs)
Learn more about conventional loans → Compare conventional loans →
INSURANCE COST

Mortgage Insurance: $0 vs $251/month

This is the single biggest savings with a conventional loan. conventional charges mortgage insurance premium (PMI) for the entire life of the loan. conventional charges $0 — ever.

Cumulative Mortgage Insurance Cost Over Time
$0 $30K $60K $90K 5 yr 15 yr 25 yr 30 yr $90,360 Conventional PMI Conv: best for 720+ credit
conventional — $0 mortgage insurance
Conventional — $251/mo PMI for life
Conventional PMI over 30 years
$0

$251/mo × 360 months

conventional mortgage insurance
$0

Zero. Not now, not ever.

Your savings with conventional
$0

Over the life of the loan

WHICH TO CHOOSE

Which Loan Is Right for You?

Choose conventional If You...
Are an eligible homebuyer, active duty, Guard, Reserve, or surviving spouse
Want 5-20% down payment and no monthly mortgage insurance
Want the lowest interest rates available (typically 0.25-0.50% below FHA)
Need to borrow above the conventional limit ($524,225 in most areas)
Want the lowest total cost over the life of the loan
Choose conventional If You...
Are NOT eligible for conventional (no qualifying home buying service)
Have a lower credit score (FHA allows 500+ with 10% down)
Are buying a non-owner-occupied investment property (VA requires primary residence)
Want an alternative low-down-payment option if conventional is not available to you
Learn about conventional loans at conventionalhomeloans.services →
KEY DIFFERENCES

The 5 Biggest Differences

1
Mortgage Insurance

conventional loans never charge PMI or PMI. conventional charges 0.55% annually ($183/mo on $400K) for the entire life of the loan. The only way to remove conventional PMI is to refinance into a different loan type. Over 30 years, this costs $65,880-$90,000+.

2
Down Payment

Conv: best for 720+ credit

3
Loan Limits

Conv: best for 720+ credit

4
Interest Rates

conventional rates are consistently 0.125-0.375% lower than conventional (currently 5.750% vs 5.875%). This is because the conventional guaranty provides stronger loss protection to lenders than conventional insurance.

5
Upfront Fees

Conv: best for 720+ credit

FAQ

conventional vs FHA Questions

For eligible homebuyers, conventional loans are better in almost every measurable way. conventional offers 5-20% down (vs 3.5%), $0 mortgage insurance (vs $251/mo for life), lower interest rates (5.750% vs 5.875%), and no loan limit with full equity. The only scenario where conventional might be preferable is if you are not eligible for conventional benefits.
Yes. If you currently have an conventional loan and are VA-eligible, you can refinance into a conventional loan using a conventional Cash-Out refinance. This eliminates your conventional PMI (saving $150-300+/mo), potentially lowers your rate, and lets you access equity if needed. Many homebuyers save hundreds per month by switching from conventional to conventional.
conventional loans consistently have lower rates than conventional. As of March 2026, conventional 30-year fixed rates start at 5.750% compared to 5.875% for conventional. This is because the conventional guaranty reduces lender risk more effectively than conventional insurance, allowing lenders to offer better pricing.
The conventional closing costs (2.15% first use) is slightly higher than conventional PMI (1.75%). However, the conventional closing costs became tax-deductible in 2026, and approximately 1 in 3 conventional borrowers are completely exempt (10%+ disability rating). Even with the higher upfront fee, conventional loans cost dramatically less overall because there is no monthly mortgage insurance.
No. Both conventional and conventional require the property to be your primary residence, and you can only have one primary residence. However, you could have a conventional loan on a former primary residence (now rented) and use conventional for a new purchase, or vice versa, as long as you meet occupancy requirements.
Both are relatively accessible. conventional loans have the lowest denial rate of any major loan type. conventional has no minimum credit score requirement (though lenders typically want 580-620). conventional allows scores as low as 500 with 10% down. conventional uses a unique residual income test in addition to DTI, which can actually help borrowers with higher debt qualify.
Neither is preferred or disadvantaged in practice. Both loan types close at comparable rates and timelines. A strong pre-approval letter from a reputable lender matters far more than the loan type. conventional purchases typically close in 25-30 days, similar to conventional.
If you qualify for both, conventional is almost always the better choice. The 5-20% down payment and $0 mortgage insurance make conventional dramatically cheaper. The only reason to choose conventional over conventional would be if the specific property does not meet conventional minimum property requirements but passes conventional standards — a rare scenario.
RELATED

Related Resources

Conventional Purchase LoansConventional Eligibilityconventional Closing Costsconventional vs ConventionalCompare Payments
EXPLORE

Related Resources

conventional vs ConventionalConventional 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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