EstatePass
Updated for 2026

Loan Type Comparison Calculator

Compare Conventional, FHA, VA, and USDA loans side by side. Enter your scenario to see which mortgage type saves you the most over 30 years.

4loan types
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Your Scenario

Enter your details below to see a personalized loan comparison.

$
%

$17,500 down

%

Veteran / Active Military?

Enables VA loan option

Rural Area?

Enables USDA loan option

Side-by-Side Comparison

All calculations based on a 30-year fixed-rate mortgage.

Best For You: Conventional

— Lowest 30-year total cost among eligible loan types
Feature
ConventionalBest
FHA
VA
USDA
Eligible
Veterans/active military only
Rural area required
Down Payment
5%
$17,500
5%
$17,500
5%
$17,500
5%
$17,500
Upfront FeeNone1.75% UFMIP ($5,819)1.5% Funding Fee ($4,988)1% UFGF ($3,325)
Monthly P&I$2,157$2,223$2,133$2,178
PMI / MIP
$194/mo
PMI (~8yr)
$152/mo
Annual MIP (life of loan)
--
No PMI/MIP
$97/mo
0.35% Annual Fee
Total Monthly$2,351$2,375$2,133$2,275
Total Cost (30yr)$812,492$878,286$790,422$839,873
Best ForGood credit (620+), 5-20%+ down paymentLower credit (580+), 3.5% downVeterans, 0% down, no PMIRural areas, 0% down, low fees

Estimates are for educational purposes. Actual rates, fees, and eligibility vary by lender. PMI estimates use average industry rates. FHA MIP is for the life of the loan when LTV exceeds 90%.

Choosing the Right Mortgage Loan Type

One of the most important skills a mortgage loan originator develops is matching borrowers with the right loan product. The four major loan types — Conventional, FHA, VA, and USDA — each serve different borrower profiles and come with distinct advantages, costs, and eligibility requirements. Understanding these differences is critical for both the NMLS SAFE exam and your career as an MLO.

Conventional Loans

Conventional loans are not government-insured and follow guidelines set by Fannie Mae and Freddie Mac. They require a minimum credit score of 620 and a down payment as low as 3%. The key advantage is that PMI can be cancelled once the LTV reaches 80%, unlike FHA's lifetime MIP. Conventional loans offer the best terms for borrowers with strong credit scores (740+) and larger down payments. They are the most common loan type, accounting for roughly 70% of all originations.

FHA Loans

FHA loans are insured by the Federal Housing Administration and are designed for borrowers who may not qualify for conventional financing. With a minimum credit score of 580 and a 3.5% down payment, FHA loans provide accessible homeownership. The tradeoff is mortgage insurance: a 1.75% upfront MIP and annual MIP of 0.55% for the life of the loan when LTV exceeds 90%. FHA loans are popular with first-time homebuyers and those rebuilding credit.

VA Loans

VA loans are guaranteed by the Department of Veterans Affairs and offer exceptional benefits to eligible veterans, active-duty service members, and surviving spouses. The standout features are 0% down payment and no PMI requirement, making VA loans often the lowest-cost option. A VA funding fee of 2.15% (first use) applies but can be financed into the loan. VA loans have no fixed DTI maximum, using residual income analysis instead.

USDA Loans

USDA loans are backed by the U.S. Department of Agriculture and promote homeownership in eligible rural and suburban areas. Like VA loans, USDA offers 0% down payment. The costs include a 1% upfront guarantee fee and a 0.35% annual fee — both lower than FHA's MIP. Income limits apply: borrower household income cannot exceed 115% of the area median. Many suburban areas qualify, making USDA loans more accessible than most borrowers realize.

Frequently Asked Questions

What is the difference between FHA and conventional loans?
FHA loans are government-insured and allow down payments as low as 3.5% with credit scores of 580+. They require upfront MIP (1.75%) and annual MIP for the life of the loan. Conventional loans require 3-5% down, no upfront insurance, and PMI can be removed once LTV reaches 80%. Conventional loans generally have lower total costs for borrowers with good credit.
Who qualifies for a VA loan?
VA loans are available to active-duty service members, veterans, and eligible surviving spouses. They offer 0% down payment, no PMI, and competitive interest rates. Borrowers must obtain a Certificate of Eligibility (COE). A VA funding fee of 2.15% (first use) applies but can be rolled into the loan or waived for disabled veterans.
What are the requirements for a USDA loan?
USDA loans require the property to be in a USDA-eligible rural area and the borrower's household income must not exceed 115% of the area median income. They offer 0% down payment with a 1% upfront guarantee fee and 0.35% annual fee.
Which loan type has the lowest monthly payment?
The loan with the lowest monthly payment depends on your specific situation. VA loans often have the lowest payments because they require no PMI and allow 0% down. However, FHA loans may be better for borrowers with lower credit scores, and conventional loans become more competitive as credit scores increase and down payments exceed 20%.
How do I choose the right mortgage loan type?
Consider your down payment savings, credit score, military service status, and property location. Veterans should always compare VA loans first. Rural buyers should check USDA eligibility. If you have 20%+ down and good credit (700+), conventional often wins. FHA is ideal for lower credit scores or smaller down payments.

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