A conventional loan is a popular mortgage option for homebuyers with good credit. It’s not backed by the government, but it offers great flexibility and competitive interest rates.
💡 Highlights:
- Low Down Payment: As little as 3% down for first-time buyers
- Credit Score: Minimum 600 (higher scores may get better rates)
- No PMI with 20% down
- Loan Limits: Up to $806,500 (2025) in most areas (higher in some cities)
Use It For: Buying a primary home, second home, or even an investment property
It’s a smart choice if you have stable income and want flexible loan terms with the potential to avoid mortgage insurance.
Is a conventional loan right for you?
If you’re looking for a mortgage with low fees, a conventional home loan may be a good option for you. If you are eligible, there are a number of benefits.
Benefits of a conventional loan
- Save Money: With a down payment of 20% or more, you won’t need to pay for mortgage insurance.
- Flexible Terms:Â Choose what mortgage term works best for you! Options include 30, 20, 15, and 10 year terms.
- Low Down Payment Option: It’s possible to take out a conventional loan with a down payment of just 3%.
Conventional loan eligibility requirements
- A good credit score of 620 or higher
- A down payment which can be as little as 3%
- Consistent and documented income
- A low debt-to-income ratio
Check out what your monthly payment could be by using our Conventional Mortgage Calculator…
Our mortgage calculators are for demonstration purposes only and may not reflect actual numbers for your specific mortgage. Contact us and we will walk you through the best possible mortgage scenario for your specific needs!
Principal & Interest (P&I)
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PMI
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Taxes & HOA
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Homeowners Insurance
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Purchase Price
Home Value
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Down Payment
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Current Mortgage Balance
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Cash Out
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Total Loan Amount
New Loan Amount
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Home Equity After Cash Out
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Estimated Taxes & Insurance
Property taxes are generally estimated to be 1.2% of the home's value, but may vary based on your location. Annual homeowners insurance is roughly 0.35% of the home's value but can change based on insurer. Your loan specialist can help you determine property tax and insurance rates in your area.
PMI
The PMI (Private Mortgage Insurance) is a mortgage lenders' protection in the event of a default. PMI is paid monthly as part of your mortgage payment to the lender. Once a borrower has paid the equivalent of the 20% down payment, PMI can be removed from the monthly mortgage payment.
Estimated Payment
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Loan amount
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Down payment
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Cash Out
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Home Equity After Cashout
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Interest rate
Loan term
Taxes & insurance included?
Property tax
Homeowner's insurance
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Mortgage insurance
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HOA dues
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Payment Breakdown
Amortization
Principal vs. Interest
Amortization Schedule Breakdown
Our detailed amortization schedule breaks down your mortgage payments, showing how they are split between interest and principal over the life of your loan.
Note: The actual monthly payment may be higher than what is shown here, as this schedule does not account for variable costs such as property taxes and home insurance, which are often included in your total mortgage payment.
- Principal payments: $$240,000 (the amount borrowed)
- Interest payments: $$297,554 (the cost of borrowing)