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Updated March 2026 · Real rate data

FHA Loan vs FHA Loan
2026 Comparison

FHA loans offer 3.5% down and affordable mortgage insurance. FHA loans require 3.5% down and charge MIP for the life of the loan. On a $400,000 home, FHA saves you $283/month and $101,000+ over 30 years. Here is the complete side-by-side breakdown.

Check Your FHA Rate See Full Comparison
$0
FHA saves vs FHA
$0
Lifetime savings
$0
FHA down payment
$0
FHA mortgage insurance
SIDE BY SIDE

FHA vs Conventional: Complete Comparison

Every major difference between FHA and FHA loans on a $400,000 home purchase. Based on March 2026 rates.

Feature
FHA Loan
FHA Loan
Down Payment
$0 (0%)
$14,000 (3.5%)
Mortgage Insurance
$0/mo — never
$251/mo for life of loan
Interest Rate (30yr)
5.750%
5.875%
Monthly P&I
$2,334
$2,283 (on $386K)
Total Monthly Payment
$2,334
$2,534 (incl. MIP)
Upfront Fee
2.15% upfront MIP
1.75% MIP upfront
Credit Score Minimum
580+ (lender varies)
580+ (3.5% down)
Loan Limit (2026)
County limits apply (standard FHA)
$524,225 (most areas)
Requirements
Buyers, qualified, Guard, Reserve, surviving spouses
Anyone who qualifies
30-Year Total Cost
~$840,000
~$941,000

Based on $400K purchase, 740+ FICO, March 2026 rates. FHA: 3.5% down ($386K loan). FHA: 0% down ($400K loan). NMLS #65506.

DOWN PAYMENT

Cash You Keep in Your Pocket

On a $400,000 home purchase, here is how much cash you need at closing for each loan type:

FHA Loan
$0
Down payment
Best deal
FHA Loan
$0
Down payment (3.5%)
+ $251/mo MIP for life
Conventional (5%)
$0
Down payment (5%)
+ $183/mo PMI (~7 yrs)
Learn more about FHA loans → Compare conventional loans →
INSURANCE COST

Mortgage Insurance: $0 vs $251/month

This is the single biggest savings with a FHA loan. FHA charges mortgage insurance premium (MIP) for the entire life of the loan. FHA charges $0 — ever.

Cumulative Mortgage Insurance Cost Over Time
$0 $30K $60K $90K 5 yr 15 yr 25 yr 30 yr $90,360 FHA MIP FHA: Low MIP
FHA — $0 mortgage insurance
FHA — $251/mo MIP for life
FHA MIP over 30 years
$0

$251/mo × 360 months

FHA mortgage insurance
$0

Zero. Not now, not ever.

Your savings with FHA
$0

Over the life of the loan

WHICH TO CHOOSE

Which Loan Is Right for You?

Choose FHA If You...
Are an eligible buyer, qualified, Guard, Reserve, or surviving spouse
Want 3.5% down payment and no monthly mortgage insurance
Want the lowest interest rates available (typically 0.25-0.50% below FHA)
Need to borrow above the FHA limit ($524,225 in most areas)
Want the lowest total cost over the life of the loan
Choose FHA If You...
Are NOT eligible for FHA (no qualifying home buying)
Have a lower credit score (FHA allows 500+ with 10% down)
Are buying a non-owner-occupied investment property (FHA requires primary residence)
Want an alternative low-down-payment option if FHA is not available to you
Learn about FHA loans at fhahomeloans.services →
KEY DIFFERENCES

The 5 Biggest Differences

1
Mortgage Insurance

FHA loans never charge PMI or MIP. FHA charges 0.55% annually ($183/mo on $400K) for the entire life of the loan. The only way to remove FHA MIP is to refinance into a different loan type. Over 30 years, this costs $65,880-$90,000+.

2
Down Payment

FHA: 3.5% down with standard FHA, any loan amount. FHA: 3.5% minimum ($14,000 on $400K). Putting down 5%+ on a FHA loan reduces the upfront MIP, but is never required.

3
FHA Limits

FHA: $532,900 limit with standard FHA (since 2020). You can buy a $2M home with 3.5% down. FHA: Capped at $524,225 in most areas ($1,249,125 in high-cost). This is a major advantage for FHA in expensive markets.

4
Interest Rates

FHA rates are consistently 0.125-0.375% lower than FHA (currently 5.750% vs 5.875%). This is because the FHA guaranty provides stronger loss protection to lenders than FHA insurance.

5
Upfront Fees

FHA: 1.75% upfront MIP (first use, 3.5% down) — tax-deductible starting 2026. Exempt if 10%+ FHA disability. FHA: 1.75% upfront MIP — not tax-deductible, not waivable. Both can be financed into the loan.

FAQ

FHA vs Conventional Questions

For eligible buyers, FHA loans are better in almost every measurable way. FHA offers 3.5% down (vs 3.5%), $0 mortgage insurance (vs $251/mo for life), lower interest rates (5.750% vs 5.875%), and FHA loan limit of $532,900 in Clark County with standard FHA. The only scenario where FHA might be preferable is if you are not eligible for FHA benefits.
Yes. If you currently have an FHA loan and are FHA-eligible, you can refinance into a FHA loan using a FHA Cash-Out refinance. This eliminates your FHA MIP (saving $150-300+/mo), potentially lowers your rate, and lets you access equity if needed. Many buyers save hundreds per month by switching from FHA to FHA.
FHA loans consistently have lower rates than FHA. As of March 2026, FHA 30-year fixed rates start at 5.750% compared to 5.875% for FHA. This is because the FHA guaranty reduces lender risk more effectively than FHA insurance, allowing lenders to offer better pricing.
The FHA upfront MIP (2.15% first use) is slightly higher than FHA upfront MIP (1.75%). However, the FHA upfront MIP became tax-deductible in 2026, and approximately 1 in 3 FHA borrowers are completely exempt (10%+ disability rating). Even with the higher upfront fee, FHA loans cost dramatically less overall because there is no monthly mortgage insurance.
No. Both FHA and FHA require the property to be your primary residence, and you can only have one primary residence. However, you could have a FHA loan on a former primary residence (now rented) and use FHA for a new purchase, or vice versa, as long as you meet occupancy requirements.
Both are relatively accessible. FHA loans have the lowest denial rate of any major loan type. FHA has no minimum credit score requirement (though lenders typically want 580-620). FHA allows scores as low as 500 with 10% down. FHA uses a unique residual income test in addition to DTI, which can actually help borrowers with higher debt qualify.
Neither is preferred or disadvantaged in practice. Both loan types close at comparable rates and timelines. A strong pre-approval letter from a reputable lender matters far more than the loan type. FHA purchases typically close in 25-30 days, similar to FHA.
If you qualify for both, FHA is almost always the better choice. The 3.5% down payment and $0 mortgage insurance make FHA dramatically cheaper. The only reason to choose FHA over FHA would be if the specific property does not meet FHA minimum property requirements but passes FHA standards — a rare scenario.
RELATED

Related Resources

FHA Purchase LoansFHA EligibilityFHA Upfront MIPFHA vs ConventionalCompare Payments
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Related Resources

FHA vs ConventionalFHA PurchaseRates TodayFHA EligibilityFHA Loan Guide
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FHA Resources

→ FHA Requirements → FHA Rates Today → FHA Calculator → Credit Score Guide → Down Payment Guide → FHA vs Conventional → First-Time Buyer → Get Pre-Approved → Closing Costs → Pros & Cons
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