Is a conventional loan better than FHA?

With a 680+ credit score, conventional usually wins long-term because PMI is cancellable. With lower scores or higher debt ratios, FHA often prices better. Comparing both side by side shows the real numbers.

Conventional Loans | As Little as 3% Down

Q: When can I remove PMI on a conventional loan?

Conventional PMI can be removed once you reach 20% equity through payments, appreciation, or both, and drops automatically at 22% equity.

Why conventional?

Conventional loans aren't government-insured, which means fewer upfront fees and mortgage insurance that goes away. With strong credit, they typically offer the best combination of rate and long-term cost — and because BayPort is a broker, we compare conventional pricing across many lenders instead of quoting one bank's rate.

Quick facts

As little as 3% down (first-time buyers) or 5% standard
Credit score typically 620+; best pricing at 740+
PMI required under 20% down — but cancellable at 20% equity
Primary homes, second homes, and investment properties
Loan amounts up to the conforming limit (above that, see Jumbo)

Conventional loan FAQs

When can I remove PMI on a conventional loan?

Unlike FHA mortgage insurance, conventional PMI can be removed once you reach 20% equity — through payments, appreciation, or both. It also drops automatically at 22% equity.

Conventional vs. FHA — which is better for me?

With a 680+ score, conventional usually wins long-term because PMI is cancellable. With a lower score or higher debt ratio, FHA often prices better. We run both side by side so you see the real numbers.

Can I use a conventional loan for an investment property?

Yes, with higher down payment requirements (typically 15–25%). For rental properties, also compare our DSCR loans, which qualify on rental income instead of your tax returns.

Conventional Loans