When is FHA cheaper than Conventional?

FHA is typically cheaper for borrowers with credit scores below 680 or higher debt-to-income (DTI) ratios, because FHA mortgage insurance rates and interest rates do not penalize lower credit scores as heavily as private conventional PMI.

Can I refinance out of FHA MIP into Conventional later?

Yes. Many homebuyers start with an FHA loan for its flexible guidelines and subsequently refinance into a Conventional loan once their property equity reaches at least 20% to eliminate mortgage insurance entirely.

USAUpdated for 2026Real Estate

FHA vs Conventional Mortgage & PMI Comparison Calculator 2026

Compare total 5-year and 30-year lifetime mortgage costs between FHA (1.75% Upfront MIP + life-of-loan annual MIP) and Conventional financing (cancellable PMI at 80% LTV under federal HPA).

Mortgages & Home Loans Real Estate & Property Housing & Residential Finance & Investment

Calculated Result

Monthly Cost Advantage (Conventional vs FHA)

$-57.11

Calculator Inputs

Home Purchase Price

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Down Payment Percentage (%)

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Borrower Credit Score Range

Monthly Cost Advantage (Conventional vs FHA)

$-57.11

Conventional Total Monthly (P&I + PMI)

$2,322.84

FHA Total Monthly (P&I + MIP)

$2,265.73

Conventional Monthly PMI (Cancellable at 80% LTV)

$166.25

FHA Monthly Annual MIP (0.55% Life of Loan)

$155.06

FHA Upfront MIP Financed (1.75%)

$5,818.75

5-Year Total Conventional Outflow

$139,370.4

5-Year Total FHA Outflow (with UFMIP)

$141,762.55

FHA annual MIP lasts for the entire 30-year term if the initial down payment is less than 10%. Conventional PMI automatically terminates at 78% LTV or can be cancelled at 80% LTV under the federal Homeowners Protection Act.

This calculator is a mathematical model for general financial estimation, planning, and educational guidance. Results depend on your inputs and standard formulas, and do not constitute binding financial, tax, or investment advice. Always consult a qualified professional before making financial decisions.

Official Statute: Homeowners Protection Act (12 U.S.C. § 4901 - Automatic PMI Cancellation) & HUD Handbook 4000.1 (FHA Mortgage Insurance Premiums)Last Verified: 2026-09-04

Calculation Methodology

FHA Loan = Base Loan (96.5%) + 1.75% Upfront MIP. FHA Monthly MIP = (FHA Loan * 0.55%) / 12. Conventional Base Loan = Home Price - Down Payment. Conventional Monthly PMI = (Base Loan * PMI Rate %) / 12 (terminates at 80% LTV). Total 5-Year Cost = 60 Months of (P&I + Insurance).

Frequently Asked Questions

FHA requires both an Upfront MIP (1.75% added to the balance) and an ongoing Annual MIP (0.55%) that lasts for the entire 30-year loan term if you put down under 10%. Conventional loans have no upfront fee, and monthly PMI drops off automatically once you reach 20%-22% equity.

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FHA vs Conventional Mortgage & PMI Comparison Calculator 2026

Calculator Inputs

Calculation Methodology

Frequently Asked Questions

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