"5-year cost" is the interest, mortgage insurance and upfront fees you would pay in the first five years. It leaves out the principal you pay down, because that becomes your equity. Estimates only, not a loan offer or a rate quote. Closing costs are not included.
How this comparison works
All three loans use the same home price, interest rate, property tax, insurance and HOA, so the differences come only from the loan programs themselves: the down payment each one needs, the upfront fee, and the monthly mortgage insurance. Conventional mortgage insurance depends heavily on your credit score and down payment, which is usually the main reason one buyer is better off with FHA and another with conventional.
In real life the rates are often different too. FHA and VA rates are frequently a little lower than conventional, so you can type a different rate in each column to see how that changes the answer.
Loan comparison questions
Is FHA or conventional cheaper?
It depends mostly on your credit score and down payment. With a score of about 720 or higher, conventional is often cheaper because its mortgage insurance is low and can be removed later. With a lower score or a small down payment, conventional mortgage insurance gets expensive and FHA can have the lower monthly payment, even after its upfront premium.
Why does my credit score change the conventional loan so much?
Private mortgage insurance on a conventional loan is priced by credit score and down payment. With 3% to 5% down, the yearly cost can be around 0.5% of the loan with a score above 760 and more than 1.5% of the loan with a score in the 600s. FHA mortgage insurance is the same for most borrowers regardless of score.
Can I remove mortgage insurance later?
Conventional mortgage insurance can generally be removed once your balance reaches 80% of the original value on request, and it ends automatically at 78%. FHA mortgage insurance lasts for the life of the loan when you put down less than 10%, and for 11 years with 10% or more down; many borrowers remove it by refinancing into a conventional loan later. VA loans have no monthly mortgage insurance.
Who qualifies for a VA loan?
Eligible veterans, active-duty service members, qualifying National Guard and Reserve members and certain surviving spouses. VA loans allow 0% down and have no monthly mortgage insurance, but most borrowers pay a one-time funding fee unless they are exempt, for example because they receive VA disability compensation.
What credit score do I need for each loan?
FHA allows 3.5% down with a score of 580 or higher. Conventional loans generally need at least 620 at most lenders. The VA does not set a minimum score, but most lenders look for about 580 to 620. Individual lenders can set higher requirements.
Sarah Baraz is based in San Antonio and licensed in Texas, Florida and California. Educational estimate only. This is not a loan offer, rate quote, pre-approval or commitment to lend. Conventional mortgage insurance rates are typical published estimates for a 30-year fixed loan on a single-family primary home and vary by lender, insurer and loan details. The example rate is Freddie Mac's Primary Mortgage Market Survey national average for the week shown and is not available to every borrower. Programs, guidelines, rates and eligibility can change and are subject to underwriting.