Put the three main loan types side by side for the same home and see which one really costs less over the years you expect to keep it.
The home
$
years
% / yr
$
Conventional
%
%
% / yr
FHA
%
%
VA
%
%
Side by side
Lowest net cost over your stay
$0
Lowest monthly payment
$0
Per loan
Conv.
FHA
VA
Down payment
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—
—
Upfront fee
—
—
—
Loan amount
—
—
—
Principal + interest
—
—
—
Mortgage insurance
—
—
—
Tax + insurance
—
—
—
Monthly payment
—
—
—
Insurance ends
—
—
—
Paid over stay
—
—
—
Balance at exit
—
—
—
Net cost
—
—
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Which loan costs least over your stayExtra net cost compared with the cheapest loanHow this is calculated
Each loan is simulated month by month on the same home price. Conventional: PMI = loan × PMI rate ÷ 12 while the down payment is under 20% and the scheduled balance is above 78% of the price.
FHA: 1.75% upfront premium financed; annual MIP from HUD Mortgagee Letter 2023-05 on the average balance of each loan year, for 11 years with 10% or more down, otherwise for the life of the loan. VA: funding fee from va.gov financed; no monthly mortgage insurance.
Net cost over your stay = down payment + all monthly payments (principal, interest, mortgage insurance, property tax, insurance) − (home price − loan balance when you leave). Appreciation, closing and selling costs are left out because they are about the same for each loan.
Every loan here is compared on the same home price. Conventional loans charge private mortgage insurance (PMI) when you put less than 20% down; by law it ends automatically once your balance is scheduled to reach 78% of the original value (CFPB). PMI pricing depends on your credit score and down payment, so ask lenders for a quote and enter it. FHA loans add a 1.75% upfront premium and an annual premium at the rates in HUD Mortgagee Letter 2023-05, which lasts 11 years with 10% or more down and for the life of the loan otherwise. VA loans have no monthly mortgage insurance but most borrowers pay a one-time funding fee (VA funding fee table).
Net cost over your stay adds up every payment and your down payment, then subtracts the equity you would own when you leave (the price minus the loan balance). It leaves out home price changes, closing costs and selling costs, which are about the same whichever loan you pick, so it isolates the cost of the loan itself. Rates shown are illustrative: FHA and VA rates are often a little lower than conventional rates, but compare real Loan Estimates. Read FHA vs. conventional and VA loan basics for the eligibility rules.
Common questions
Is FHA or conventional cheaper?
It depends on your down payment, credit score and how long you keep the loan. FHA often wins on the monthly payment for lower credit scores, while conventional often wins over time because PMI ends and there is no upfront premium. Enter your own quotes to see which applies to you.
Why does FHA cost more over time even with a lower rate?
With less than 10% down, FHA mortgage insurance lasts for the life of the loan, and the 1.75% upfront premium is added to your balance. Conventional PMI ends automatically when your balance is scheduled to reach 78% of the home's original value.
Should I use a VA loan if I am eligible?
For most eligible borrowers it is the lowest-cost option because there is no monthly mortgage insurance. The funding fee adds to the balance unless you are exempt, for example if you receive VA disability compensation.