Interactive real estate analysis
FHA vs. Conventional Loan Calculator
Compare payments, cash needed and mortgage insurance.
What the loan comparison measures
Compare the cash needed at closing and the cost of holding each loan for the period you expect to own it. A lower rate or lower first payment alone does not settle the comparison.
How to Use This Calculator
- Use the same property price and ownership horizon for both loans.
- Enter each loan’s down payment, rate, insurance and fees.
- Compare remaining balances as well as payments and upfront cash.
Run Your Numbers
Enter your assumptions below. The calculator provides educational estimates; confirm inputs for your property and financing.
If the calculator does not load, open the calculator in a new tab.
Understand the numbers
Formulas and Assumptions
This guide explains the core calculation methods. The widget’s detailed assumptions and schedules govern its displayed results.
- Base loan = purchase price − down payment
- Financed FHA loan = base loan + financed upfront mortgage insurance
- Monthly housing payment = principal and interest + taxes/12 + insurance/12 + monthly mortgage insurance + HOA
- Interest cost through month k = total principal-and-interest payments through k − principal repaid through k
How to Interpret the Results
Apply the mortgage payment formula to each loan. Compare upfront costs, interest and insurance over the same ownership period, accounting for the remaining loan balances. Mortgage insurance rates and cancellation rules depend on the program and borrower; use the current assumptions shown inside the calculator.
Use consistent time periods and enter percentages in the format requested by each field. Test conservative assumptions as well as your expected case. Estimates are not a lending commitment or individualized financial, legal or tax advice.
← Back to All CalculatorsDetailed calculator guide
Detailed Methodology and Model Assumptions
Mortgage Insurance and Loan Cost
A financed upfront premium increases the FHA loan principal. Monthly insurance is modeled using the chosen annual premium and original loan basis. Conventional insurance stops at the modeled scheduled cancellation point; FHA duration follows the program assumptions displayed in the tool.
Compare down payment and closing cash, principal and interest, mortgage insurance and the remaining balance. Taxes, property insurance and association dues may be the same across the two choices and should not be mistaken for differences in loan pricing.
Full-Term Versus Ownership-Horizon Comparisons
A full-term total adds closing cash and each scheduled payment, with insurance charged only during the modeled insurance period. That is a nominal cash-outlay comparison, not a discounted investment return.
If you expect to move sooner, compare the same number of months and account for each remaining balance. Do not assume every borrower or property qualifies for the same rate, insurance premium or down-payment structure.
Worked Example
Hypothetical illustration: these figures are separate from the live calculator inputs.
On a hypothetical $300,000 purchase, a 3.5% down payment is $10,500 and a 5% down payment is $15,000. The base loans are $289,500 and $285,000 before any financed fees. This $4,500 upfront difference is only the start: loan-specific interest, insurance and closing costs determine the longer-term comparison.
Which loan fits better?
Compare available cash, reserve needs and the actual lender quotes. Mortgage insurance structure, credit profile and expected ownership period can matter as much as the advertised rate.
Rules of Thumb, and Their Limits
A smaller down payment preserves cash but increases borrowing. Compare quotes made at the same time and separate discount points from other fees.
Frequently Asked Questions
Is the lowest monthly payment always cheapest?
No. Upfront fees, insurance, term length and the remaining balance can outweigh the payment difference.
Can I assume insurance ends automatically?
No. Cancellation and duration depend on loan type and circumstances; use the applicable program and lender terms.
Massachusetts and Property-Specific Considerations
Use the municipality’s actual assessed taxes and the property’s current insurance and association costs. Local rent evidence, building condition and the transaction’s legal use matter more than a statewide average. Review current lender or tax requirements where applicable.
Explore Massachusetts investment guides · Use the due diligence checklists · Compare other calculators
Down Payment and Base Borrowing
| Down payment | Cash down | Base loan |
|---|---|---|
| 3.5% | $10,500 | $289,500 |
| 5% | $15,000 | $285,000 |
| 10% | $30,000 | $270,000 |
| 20% | $60,000 | $240,000 |
All cases use a $300,000 price. These are arithmetic scenarios rather than program eligibility claims. Upfront insurance, monthly insurance, closing fees and reserve needs are additional; use actual lender proposals for the final comparison.
Use the Comparison in Your Decision
Change one assumption at a time in the calculator, record the result and compare it with your base case. Then combine adverse assumptions to see whether the plan still fits your cash reserves and objectives. A useful scenario explains what must remain true for the transaction to work.