Does this calculator include FHA upfront MIP or PMI cancellation?

No. It uses simplified flat annual MIP/PMI percentages converted to monthly charges and assumes they continue for the entire term. In reality, FHA has an upfront MIP and different rules for when annual MIP can end, while conventional PMI can often be removed once you reach certain equity thresholds.

Can I use this to decide definitively between FHA and conventional?

It’s best used as a comparison tool rather than a final decision engine. Actual lender quotes, your credit profile, local loan limits, and MI pricing details will all affect which option is better for you. Use this as a starting point, then ask lenders for detailed Loan Estimates.

Why might FHA show a lower payment even if the rate is similar or higher?

FHA’s smaller down payment may produce a slightly larger loan amount, but its MIP structure and rate can sometimes make total payments competitive with conventional, especially for borrowers with lower credit scores or in certain MI pricing tiers. Conversely, conventional may win out if you qualify for low PMI and can afford a higher down payment.

Does this account for tax deductions on mortgage interest or MI?

No. It focuses on pre‑tax monthly payments. Whether interest or mortgage insurance is deductible depends on current tax law and your specific situation. A tax professional can help evaluate those effects.

Should I focus only on monthly payment when choosing?

Monthly payment matters for affordability, but you should also consider total costs over time, ability to remove PMI, refinance plans, and how comfortable you are with the different program requirements. This calculator gives one slice of the comparison—cashflow and down payment—but not the full picture.

finance calculator

FHA vs Conventional 95 LTV Calculator

Compare payments and down payments for FHA (3.5% down) versus a 95% LTV conventional loan, including PMI/MIP and escrow estimates.

Results

FHA monthly payment (PITI+MIP): $3,348
Conventional monthly payment (PITI+PMI): $3,462
FHA down payment (3.5%): $15,750
Conventional down payment: $22,500
FHA MIP monthly: $199
Conventional PMI monthly: $285

Overview

FHA loans with 3.5% down and conventional loans with 5% down (95% LTV) are two of the most common low‑down‑payment options for US homebuyers when saving a large down payment is difficult.

FHA often offers more flexible credit and lower minimum down payments but requires upfront and ongoing mortgage insurance premiums (MIP). Conventional 95% LTV loans may have stricter qualification standards but can offer lower long‑term costs, especially if PMI can eventually be removed as you build equity.

This calculator compares an FHA 3.5% down scenario to a 95% LTV conventional loan by estimating monthly payments (including principal and interest, mortgage insurance, and escrowed taxes and insurance) and upfront down payments.

How to use this calculator

Enter the home price along with FHA and conventional interest rates and a shared loan term (for example, 30 years).
Enter the conventional down payment percentage (commonly 5% for a 95% LTV loan). FHA is assumed to use 3.5% down.
Enter annual FHA MIP and conventional PMI rates, plus annual property tax and homeowners insurance estimates.
The calculator computes loan amounts for FHA and conventional, estimates base principal-and-interest payments for each, and adds monthly MIP/PMI and monthly escrows for taxes and insurance.
Review the FHA vs conventional monthly payment estimates and the required down payments to see which option appears more affordable at first glance.
Experiment with different interest rates, MI factors, and down payment percentages to see how they shift the comparison.

Inputs explained

Home price: The purchase price of the property you are evaluating. Down payments and loan amounts for FHA and conventional are derived from this value.
FHA rate (APR %): The annual interest rate for the FHA loan scenario, expressed as a percentage. FHA rates may differ from conventional rates depending on your profile and market conditions.
Conventional rate (APR %): The annual interest rate for the conventional 95% LTV loan scenario. Even a small rate difference can change the monthly payment comparison.
Term (years): The loan term in years (commonly 30 or 15). This calculator assumes both FHA and conventional use the same term to keep comparisons consistent.
Conventional down payment %: The percentage of the home price you plan to put down on the conventional loan (for example, 5% for a 95% LTV structure). FHA down payment is fixed at 3.5% in this model.
FHA annual MIP (%): Annual FHA mortgage insurance premium as a percentage of the FHA loan amount. The calculator divides this by 12 to estimate a monthly MIP amount (simplified; actual MIP tables vary by LTV and term).
Conventional PMI annual (%): Annual private mortgage insurance rate for the conventional loan, expressed as a percentage of the loan amount. The calculator divides this by 12 to estimate monthly PMI.
Property tax (annual): Estimated yearly property taxes for the home. The calculator divides this by 12 and includes it as an escrow component in both FHA and conventional payment estimates.
Homeowners insurance (annual): Estimated yearly homeowners insurance premium. The calculator divides this by 12 and adds it to both FHA and conventional payment estimates as escrowed insurance.

Outputs explained

FHA monthly payment (PITI+MIP): Estimated FHA monthly payment including principal and interest, monthly FHA MIP, and monthly escrow for property taxes and homeowners insurance (PITI+MIP).
Conventional monthly payment (PITI+PMI): Estimated conventional monthly payment including principal and interest, monthly PMI, and monthly escrow for property taxes and homeowners insurance (PITI+PMI).
FHA down payment (3.5%): The FHA down payment in dollars, fixed at 3.5% of the home price in this model.
Conventional down payment: The conventional down payment amount in dollars, based on the home price and the conventional down payment percentage you entered.
FHA MIP monthly: The estimated monthly FHA mortgage insurance premium using the annual MIP rate and FHA loan amount, divided by 12 (simplified).
Conventional PMI monthly: The estimated monthly private mortgage insurance charge on the conventional loan using the annual PMI rate and loan amount, divided by 12 (simplified).

How it works

FHA down payment = 3.5% of price; conventional down payment = entered %. Loans are price minus down payment.

Monthly payment = P&I + monthly PMI/MIP + escrowed taxes/insurance.

FHA uses annual MIP; conventional uses annual PMI—entered as simple annual percentages divided by 12.

Formula

FHA down payment = Home price × 3.5%
Conventional down payment = Home price × Conventional down %

FHA loan amount = Home price − FHA down payment
Conventional loan amount = Home price − Conventional down payment

Monthly interest rate (r) = APR ÷ 12
Number of months (n) = Term years × 12

Base monthly P&I payment (for each loan) = Loan × [ r × (1 + r)^n ] ÷ [ (1 + r)^n − 1 ]

Monthly MIP (FHA) = FHA loan amount × (FHA annual MIP % ÷ 100) ÷ 12
Monthly PMI (Conventional) = Conventional loan amount × (Conventional PMI annual % ÷ 100) ÷ 12

Monthly property tax = Property tax annual ÷ 12
Monthly homeowners insurance = Insurance annual ÷ 12

FHA monthly payment (PITI+MIP) = FHA P&I + Monthly MIP + Monthly property tax + Monthly insurance
Conventional monthly payment (PITI+PMI) = Conventional P&I + Monthly PMI + Monthly property tax + Monthly insurance

When to use it

Deciding between FHA and a low-down-payment conventional loan.
Showing how PMI/MIP and down payment size affect monthly PITI.
Stress-testing affordability by adjusting PMI/MIP assumptions.

Tips & cautions

PMI may drop off on conventional once LTV hits 80%; FHA MIP often stays for the term at low down payments—this model keeps them constant for simplicity.
Check lender-specific MI factors and loan limits; this uses simple flat percentages.
Increasing down payment lowers both PMI and P&I; test scenarios to hit a target monthly budget.
Simplified flat PMI/MIP rates; real MI pricing is tiered by FICO/LTV/program.
Does not model MI removal timing or FHA upfront MIP.
Taxes/insurance are estimates; adjust to your market.

Worked examples

$450k home, FHA 3.5% vs conventional 5% down (sample rates and MI)

FHA down payment = $450,000 × 3.5% = $15,750; FHA loan ≈ $434,250.
Conventional down payment at 5% = $450,000 × 5% = $22,500; conventional loan ≈ $427,500.
Using your entered FHA and conventional rates and MI factors, the calculator computes separate P&I payments and monthly MIP/PMI for each loan.
Add monthly taxes and insurance to each to see PITI+MIP and PITI+PMI side by side.
The comparison shows how much more (or less) you pay each month, and how much extra cash you need up front for the larger conventional down payment.

Testing a higher conventional down payment

Start with a 5% conventional down payment and note the monthly payment and PMI cost.
Increase the conventional down payment % to 10% and rerun the calculator.
Observe how the conventional monthly payment and PMI drop and compare again to FHA.
This helps you see the trade-off between additional cash at closing and lower monthly payments.

Deep dive

Compare FHA 3.5% down vs 95% LTV conventional monthly payments and down payments, including PMI/MIP, taxes, and insurance.

Enter rates, PMI/MIP, taxes, and insurance to see which option fits your budget.

FAQs

Does this calculator include FHA upfront MIP or PMI cancellation?: No. It uses simplified flat annual MIP/PMI percentages converted to monthly charges and assumes they continue for the entire term. In reality, FHA has an upfront MIP and different rules for when annual MIP can end, while conventional PMI can often be removed once you reach certain equity thresholds.
Can I use this to decide definitively between FHA and conventional?: It’s best used as a comparison tool rather than a final decision engine. Actual lender quotes, your credit profile, local loan limits, and MI pricing details will all affect which option is better for you. Use this as a starting point, then ask lenders for detailed Loan Estimates.
Why might FHA show a lower payment even if the rate is similar or higher?: FHA’s smaller down payment may produce a slightly larger loan amount, but its MIP structure and rate can sometimes make total payments competitive with conventional, especially for borrowers with lower credit scores or in certain MI pricing tiers. Conversely, conventional may win out if you qualify for low PMI and can afford a higher down payment.
Does this account for tax deductions on mortgage interest or MI?: No. It focuses on pre‑tax monthly payments. Whether interest or mortgage insurance is deductible depends on current tax law and your specific situation. A tax professional can help evaluate those effects.
Should I focus only on monthly payment when choosing?: Monthly payment matters for affordability, but you should also consider total costs over time, ability to remove PMI, refinance plans, and how comfortable you are with the different program requirements. This calculator gives one slice of the comparison—cashflow and down payment—but not the full picture.

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This FHA vs conventional 95 LTV calculator provides simplified estimates of monthly payments and down payments using user-entered interest rates, mortgage insurance factors, and tax/insurance assumptions. It does not reflect all FHA or conventional program rules, loan limits, or mortgage insurance structures and is not a Loan Estimate, rate lock, or offer of credit. Actual payments, qualification, and program availability depend on lender guidelines, your credit profile, property details, and current regulations. Always review official disclosures and consult a licensed mortgage professional before making borrowing or homebuying decisions.