How much do I need to put down on a conventional loan?

Less than many people assume. Putting down under 20% generally means mortgage insurance, which raises the monthly payment but can still be the better move if it gets you into a home sooner. We'll show both scenarios side by side.

When can I stop paying mortgage insurance?

On a conventional loan, mortgage insurance can typically be removed once you reach enough equity, unlike FHA, where it often lasts the life of the loan. That difference alone is sometimes the deciding factor between the two.

Is a conventional loan harder to qualify for than FHA?

Generally the credit and documentation review is a little tighter. But if you qualify, conventional often costs less over time. It is worth comparing rather than assuming FHA is the easier route.

Conventional loans

The most widely used path to financing a home

Conventional loans are not backed by a government agency. For borrowers with reasonably established credit they are often the lowest total cost, particularly because the mortgage insurance can usually be removed later.

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Often considered by

Homebuyers with established credit
Homeowners refinancing

Worth weighing

Qualification depends on credit, income and the property
Mortgage insurance may apply below certain equity levels

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What “conventional” actually means

It simply means the loan is not insured or guaranteed by a government programme like FHA or VA. Most conventional loans follow guidelines set by Fannie Mae and Freddie Mac, which is what makes them widely available and consistently priced.

That standardisation is the point: because the rules are well established, pricing tends to be competitive and the process predictable.

How mortgage insurance works here

If you put down less than 20%, conventional loans carry private mortgage insurance. This is where conventional and FHA differ most over the long run.

It can come off

Once you build enough equity, private mortgage insurance can generally be removed, either by request or automatically. On most FHA loans today, the annual premium stays for the life of the loan instead.

Over a full loan term that difference can outweigh a lower starting rate, which is exactly why the two are worth comparing rather than assuming.

Choosing a term

Conventional loans come in fixed and adjustable structures. The most common decision is between a 30-year and a 15-year fixed term.

Feature	30-year fixed	15-year fixed
Monthly payment	Lower	Considerably higher
Total interest	More over the full term	Less
Rate	Typically slightly higher	Typically slightly lower
Qualifying power	Supports a larger loan	Supports a smaller loan
Flexibility	Can pay extra voluntarily	Higher payment is required