At 5% down on a $350,000 home, this calculator's own numbers show the crossover sits around a 740 credit score: above it, conventional PMI usually costs less per month than FHA MIP; at 720–739 the two land within a few dollars; below that, FHA usually wins, sometimes by well over $100 a month. Credit score is doing more work than down payment in this comparison, because FHA's mortgage insurance doesn't respond to your credit score at all.
Two totally different ways of pricing risk
FHA and conventional loans handle mortgage insurance on completely different logic, and this calculator's constants make the difference concrete. FHA charges a flat 1.75% upfront premium plus an annual premium set by loan-to-value (LTV) and loan size: on a 30-year loan with a base amount up to $726,200, 0.55% above 95% LTV and 0.50% at 95% or below (0.75% and 0.70% above $726,200), per HUD Mortgagee Letter 2023-05. At 90% LTV or below the premium stops after 11 years; above 90% it runs for the life of the loan. Your credit score never enters that formula.
Conventional private mortgage insurance (PMI) does the opposite — it is $0 at 80% LTV or below, and above that it prices credit score aggressively and LTV as well. This calculator reads PMI from a published mortgage-insurer rate card (the same one our PMI calculator uses): at 5% down (the 90.01–95% LTV row) it runs from 0.38% a year for a 760+ score up to 1.42% for 620–639 — nearly a fourfold spread for the same loan.
| Credit score | LTV 95.01–97% | LTV 90.01–95% | LTV 85.01–90% | LTV 85% and under |
|---|---|---|---|---|
| 760+ | 0.58% | 0.38% | 0.28% | 0.19% |
| 740–759 | 0.70% | 0.53% | 0.38% | 0.20% |
| 720–739 | 0.87% | 0.66% | 0.46% | 0.23% |
| 700–719 | 0.99% | 0.78% | 0.55% | 0.25% |
| 680–699 | 1.21% | 0.96% | 0.65% | 0.28% |
| 660–679 | 1.54% | 1.28% | 0.90% | 0.38% |
| 640–659 | 1.65% | 1.33% | 0.91% | 0.40% |
| 620–639 | 1.86% | 1.42% | 0.94% | 0.44% |
National MI Monthly Advantage borrower-paid card MA.MN.BP.2022-03, effective 2022-03-01, 30-year fixed, at Fannie Mae's standard coverage; checked 2026-09-29. Applied to the base loan whenever LTV is above 80%; PMI is $0 at 80% LTV or below. A lender's live quote from an insurer's pricing engine can differ. FHA's annual MIP, by contrast, does not vary by credit score at all.
A worked crossover, step by step
Take a $350,000 home with 5% down ($17,500), financed at the Freddie Mac PMMS rate for the week of September 3, 2026 — 6.71% on a 30-year term. The base loan is $332,500, putting LTV at 95%.
Lay those side by side against the FHA total of $2,324 and the crossover point falls at the 720–739 band, where the two are $7 a month apart — inside the $30 this calculator calls "similar". A 760+ borrower pays $71 a month less on conventional; a 620–639 borrower pays $217 a month less on FHA. The down payment and home price never changed — credit score alone flipped which loan type wins.
Why FHA MIP can outlast conventional PMI even when FHA starts cheaper
Monthly cost is only half the comparison — the other half is how long you pay it. At 95% LTV, this calculator's amortization shows conventional PMI on the scenario above self-cancelling (balance falling to 80% of the home's price) after about 126 months, roughly 10.5 years, purely from normal principal paydown at 6.71%. FHA's annual MIP on this same 95%-LTV loan never gets that option: because the starting LTV is above 90%, this calculator prices it for the life of the loan, exactly as HUD's own cancellation rule requires.
That timeline gap is why the calculator's 5-year total-cost comparison and its lifetime comparison can point in different directions. Over 5 years (60 months), a 760+ conventional borrower pays $135,183 versus $139,433 for FHA — a $4,250 conventional advantage. A 640–659 borrower pays $150,977 conventional versus that same $139,433 FHA — now FHA is $11,544 cheaper, and even after PMI eventually cancels around year 10.5, a decade of higher monthly PMI on a lower credit score has already erased much of conventional's structural edge.
At 20% down, conventional PMI disappears — FHA's MIP doesn't
Down payment size changes this comparison too, and not symmetrically. Take the same $350,000 home, same 6.71% rate, but move to 20% down ($70,000), which puts LTV at exactly 80%.
That $148-a-month gap is the whole annual premium, and its source is what matters: conventional mortgage insurance turns off completely at 80% LTV, while FHA's does not. Put 20% down, 30% down, or more: on a 30-year FHA loan the annual rate does not drop below 0.50%. The only relief a bigger down payment buys is the clock — at 90% LTV or below the premium stops after 11 years (132 months) instead of running for the life of the loan. On this loan that is about $15,400 in MIP that a conventional loan at the identical down payment doesn't carry.
That's also why this calculator won't call a result close: it labels FHA and conventional "similar" only when their total monthly costs land within $30 of each other, and treats anything wider as a real winner. The $148 gap at 20% down clears that bar easily, so on this calculator's own logic, conventional is the call once you can put a fifth down — and on its numbers conventional is already cheaper per month at every credit tier from 15% down.
Why the two loan types cap out at different prices
The two programs also part ways on how much they'll insure. HUD sets the 2026 FHA floor at $541,287 for a one-unit home. Conventional loans backed by Fannie Mae and Freddie Mac follow a different, higher schedule: the FHFA set the 2026 baseline conforming limit at $832,750, roughly $291,000 above the FHA floor, with both programs sharing the same $1,249,125 ceiling in the highest-cost counties.
That gap matters for borrowers financing above the FHA floor but below the conforming baseline: FHA insurance simply isn't available past its county limit, while a conventional loan in that same price range stays inside standard conforming pricing rather than stepping up into jumbo territory. For most of this calculator's users — home prices well under $541,287 — that ceiling never comes into play, but it's worth checking your county's FHA limit before assuming both programs are on the table.
Neither premium is tax-deductible
Whichever side of the comparison wins, don't discount either monthly figure for an expected tax break. IRS Publication 936 is explicit: "the itemized deduction for mortgage insurance premiums has expired. You can no longer claim the deduction." That covers FHA's MIP and conventional PMI equally — both are full, after-tax costs in this comparison.
Methodology
FHA figures use this calculator's 1.75% upfront premium and HUD Mortgagee Letter 2023-05's annual MIP for terms over 15 years (0.50% at 95% LTV or below, 0.55% above; 0.70% / 0.75% for base loans above $726,200), cancelling after 11 years at 90% LTV or below; conventional figures price PMI from National MI's published Monthly Advantage borrower-paid rate card (MA.MN.BP.2022-03, effective March 1, 2022; confirmed September 30, 2026 as the insurer's current published card) by loan-to-value row and eight credit-score tiers, at Fannie Mae's standard coverage, with PMI removed at 80% LTV and a simulated monthly amortization to find the cancellation month. All worked figures use the September 3, 2026 Freddie Mac PMMS 30-year rate (6.71%) for both loan types, on a $350,000 purchase with 5% down. FHA and conforming loan limits are HUD's and FHFA's published 2026 figures.
Sources
- Freddie Mac — Primary Mortgage Market Survey, week ending September 3, 2026 — accessed 2026-09-05
- HUD — Mortgagee Letter, 2026 FHA Loan Limits (HUD No. 25-145) — accessed 2026-09-05
- FHFA — 2026 Conforming Loan Limit Values — accessed 2026-09-05
- IRS — Publication 936, Home Mortgage Interest Deduction (2025) — accessed 2026-09-05
- National MI — Monthly Advantage BPMI rate card MA.MN.BP.2022-03 (effective 2022-03-01) — accessed 2026-09-30
- HUD — Mortgagee Letter 2023-05, annual MIP rates (effective March 20, 2023) — accessed 2026-09-30