A bigger down payment does not remove FHA mortgage insurance. FHA charges 1.75% up front plus an annual MIP no matter how much you put down — putting 10% or more down only shortens that annual MIP to 11 years instead of the life of the loan. Conventional at 20% down has no mortgage insurance at all. Below, put your real numbers in both columns and see what that actually costs.
Built for buyers in the City of Maricopa and Pinal County, AZ. Defaults are typical local figures — change every one of them.
Mortgage insurance is modelled month by month against the scheduled loan balance. FHA annual MIP is charged on the outstanding balance; conventional PMI is a fixed monthly amount set at closing and drops off automatically once the scheduled balance reaches the LTV you choose. Taxes, insurance and HOA are held flat — in reality they rise, and they rise the same for both loans.
Every FHA loan carries an upfront mortgage insurance premium of 1.75% of the base loan, normally financed into the loan, plus an annual MIP collected monthly. That annual MIP is charged whether you put down 3.5% or 25%.
What your down payment changes is how long you pay it:
That 10% line is a hard edge. 9.9% down and 10.1% down are two very different loans.
Conventional PMI applies when you put down less than 20%. It is not permanent: once your scheduled balance reaches 78% of the original price the lender must cancel it automatically, and you can request cancellation at 80%.
At 20% down or more there is no mortgage insurance at all, upfront or monthly.
So the crossover is the real question: FHA often wins on rate and on qualifying, conventional often wins on what you pay after year one. The calculator above is there to show you which one wins for your numbers.
New-build incentives in Maricopa are frequently tied to the builder’s preferred lender, and the headline rate is often available only on an FHA loan. That can genuinely be the better deal — a large enough rate buy-down can outrun the mortgage insurance. It can also quietly cost more over the years you actually plan to stay. Run both. Use the same price and the same taxes in each column, change only the loan.
I am a REALTOR®, not a licensed mortgage loan originator. This calculator produces estimates for planning and comparison only. It is not a loan offer, not a rate quote, not a commitment to lend, and not mortgage advice. Every rate on this page is a number you typed — nothing here is fetched from a lender and nothing here reflects a rate available to you today.
Real numbers depend on credit, debt-to-income, loan limits, property type, occupancy, appraisal and the pricing your lender is offering that day. Mortgage insurance rates, FHA program rules and cancellation rules change. Confirm every figure with a licensed lender before you make a decision or write an offer.
Want that conversation? I will connect you with a lender who will price both scenarios properly — Josh Baratta is one of the loan officers I work with, and this comparison is exactly the conversation he is good at. Reach out here, see my lending partners on the buyers page, or bring me the numbers you get from any lender and I will read them with you.
No. FHA charges the 1.75% upfront premium and the annual MIP regardless of down payment. Putting 10% or more down shortens the annual MIP to 11 years instead of the life of the loan — it does not eliminate it. If your goal is no mortgage insurance, that is a conventional loan at 20% down.
Automatically when your scheduled balance reaches 78% of the home’s original value, and by request at 80%. It is based on the original amortization schedule, so extra principal payments do not automatically move the date — ask your servicer what they require. At 20% down or more, PMI never applies.
Not always. FHA often carries a lower note rate and is easier to qualify for, which can make it cheaper month to month. Conventional frequently costs less over five or ten years once mortgage insurance is factored in, especially with 10–20% down. Which one wins depends on your rate spread, your down payment and how long you actually stay — that is exactly what the horizon selector above is for.
Builders fund rate buy-downs through their affiliated lender, so the promotional pricing usually is not portable. You are allowed to use any lender you want; you may just lose the incentive. Price the incentive against the loan terms rather than assuming the promo is automatically better.
They are good enough to compare two structures and to sanity-check what a lender tells you. They are not a loan offer. Get a written loan estimate from a licensed lender before you commit to a price or a payment.