Low Down Payment
Eligible conventional programs may allow as little as 3% down.
Conventional Mortgages
The Benchmark Mortgage. Used Strategically.
Conventional financing can offer some of the most competitive long-term mortgage structures available — but the best execution depends on your credit, down payment, property, income, and what you're comparing it against.
- As Little as 3% Down*
- Fixed + Adjustable Options*
- Removable Mortgage Insurance*
- Primary • Second Home • Investment*
Quick Answer
A conventional mortgage is a non-government-insured home loan, with many conventional loans underwritten to Fannie Mae or Freddie Mac requirements. Eligible borrowers may purchase with as little as 3% down, while larger down payments can reduce or eliminate mortgage insurance and may improve pricing. Conventional financing is often an excellent benchmark — but it should still be compared against FHA, VA, jumbo, and other eligible options rather than chosen automatically.
*Eligibility, occupancy, down payment, mortgage insurance, pricing, and program requirements vary.
Why It's the Benchmark
Simple Structure. A Lot of Strategy.
Flexible Mortgage Insurance
PMI may allow borrowers to purchase with less than 20% down and can generally be removed once applicable requirements are satisfied.
Pricing Rewards Strong Profiles
Credit, equity, occupancy, loan purpose, property type, and other risk characteristics can materially affect conventional pricing.
Multiple Property Types
Conventional financing may be available for eligible primary residences, second homes, and investment properties.
20% Down Is Not a Requirement.
- 3% Down*
- 5% Down
- 10% Down
- 15% Down
- 20%+ Down
The right down payment isn't automatically the largest one you can afford.
A larger down payment may:
- Reduce the loan amount
- Reduce or eliminate PMI
- Potentially improve pricing
- Lower the monthly payment
But using additional cash also reduces liquidity.
Putting more down is a financial decision — not a virtue.
The better question is what the additional cash actually buys you.
Compare Down Payment OptionsPrivate Mortgage Insurance
PMI Isn't Automatically Bad.
Private mortgage insurance allows eligible conventional borrowers to finance a larger percentage of the purchase price. Instead of framing PMI simply as a fee to avoid, compare the two structures:
Option A
Put 20% down and avoid PMI.
Option B
Put less down, accept PMI, and retain more cash.
Which is better depends on the cost of the mortgage insurance, the value of keeping liquidity, the borrower's financial goals, and the rest of the transaction.
Don't spend $50,000 just to save $100 without doing the math.
Illustrative framing only — the actual numbers depend on your scenario.
Unlike FHA Mortgage Insurance, Conventional PMI Doesn't Necessarily Stay Forever.
Borrower-paid PMI on many conventional mortgages may eventually be cancelled or automatically terminated when applicable federal, investor, servicer, payment-history, seasoning, and equity requirements are satisfied.
- Borrowers may be able to request cancellation once applicable requirements are met.
- Automatic termination generally follows separate statutory requirements.
- Appreciation-based removal may be possible in some circumstances, with additional requirements.
Why Two Borrowers Get Different Pricing
Conventional Pricing Is Risk-Based.
Credit
Credit profile can materially affect pricing and mortgage insurance.
Equity
Loan-to-value can affect both rate/pricing and PMI.
Occupancy
Primary, second-home, and investment transactions can price differently.
Property
Condo, multi-unit, manufactured, and other property characteristics may affect eligibility or pricing.
Loan Purpose
Purchase, rate-and-term refinance, and cash-out refinance may price differently.
This is why asking "What's today's conventional rate?" without the rest of the file doesn't tell you very much.
Conventional Isn't Automatically the Winner.
Conventional
Potential fit: Strong overall borrower profile, flexible down payment, removable PMI, conventional property/underwriting fit.
"What's the most efficient conventional structure?"
FHA
Potential fit: Lower credit profiles, higher DTI scenarios, smaller down payments, or situations where FHA pricing/qualification is more favorable.
"Does FHA solve something conventional doesn't?"
Explore FHA LoansVA
Potential fit: Eligible Veterans and service members. Potential advantages: 0% down in eligible scenarios and no monthly mortgage insurance.
"If I'm VA-eligible, compare VA before assuming conventional is better."
Explore VA LoansThe loan program is a tool. The borrower doesn't get a prize for choosing one label over another.
Credit Matters — But Don't Reduce the Decision to One Number.
Conventional pricing is sensitive to the overall credit profile. Generally, stronger credit can improve pricing and mortgage-insurance options, but the impact also depends on loan-to-value, occupancy, property type, loan purpose, and current agency/lender pricing.
First Home? Conventional May Be More Flexible Than You Think.
Eligible first-time and other qualifying homebuyers may have access to low-down-payment conventional programs. Depending on eligibility, certain programs may also offer:
- Reduced mortgage-insurance costs
- Income-based benefits
- Homebuyer education options
- Down-payment or closing-cost assistance compatibility
Conventional Isn't Just for Your Primary Home.
Second Home
Eligible second-home purchases may use conventional financing subject to occupancy and property requirements.
Investment Property
Conventional financing can also be an efficient option for eligible rental properties when the borrower's income and portfolio fit agency requirements.
Explore Investment Property LoansConforming vs. High-Balance vs. Jumbo.
Conventional financing includes loans that may fall within applicable conforming or high-cost-area agency limits. When the required loan amount exceeds applicable agency limits, jumbo financing may become the appropriate category.
Explore Jumbo & Super Jumbo LoansStrategy Before Product
Sometimes the Standard Box Isn't the Best Box.
Veteran / Service Member
Compare VA.
Lower Credit / Higher DTI
Compare FHA.
Self-Employed / Complex Income
Compare Bank Statement, P&L, or other Non-QM options.
Large Loan
Compare Jumbo / Private Client financing.
Qualifying for conventional doesn't automatically mean conventional is the best financial decision.
Compare the Structure
Don't Choose a Loan Program by the Label.
Let's compare the down payment, monthly payment, mortgage insurance, cash required, and long-term cost before deciding whether conventional is actually the right structure.
The best mortgage isn't the one with the most familiar name. It's the one that uses your money most efficiently.
Frequently Asked Questions
A conventional mortgage is a home loan that is not insured or guaranteed by a government agency. Many conventional loans are underwritten to Fannie Mae or Freddie Mac requirements, which is why they're often called conforming loans.
Down payments as low as 3% may be available for eligible borrowers and programs, with 5%, 10%, 15%, and 20%+ structures also common. The right amount depends on pricing, mortgage insurance, and how much liquidity you want to keep.
No. Twenty percent down eliminates PMI, but eligible conventional borrowers can purchase with far less. The decision is a tradeoff between cash invested upfront and the cost of mortgage insurance — not a requirement.
Private mortgage insurance protects the lender when a conventional borrower finances more than 80% of the purchase price. It's a cost that buys leverage and preserved liquidity — and unlike FHA mortgage insurance, it can generally be removed once applicable requirements are met.
Borrower-paid PMI may be cancellable by request once applicable equity, seasoning, and payment-history requirements are satisfied, and it terminates automatically under separate statutory requirements. Appreciation-based removal may also be possible in some circumstances with additional requirements.
Conventional pricing is sensitive to the overall credit profile. Stronger credit generally improves pricing and mortgage-insurance options, but the impact also depends on loan-to-value, occupancy, property type, loan purpose, and current agency and lender pricing — there is no single magic number.
Neither is universally better. Conventional often wins for stronger credit profiles and removable PMI, while FHA can be more favorable for lower credit scores or higher debt-to-income scenarios. Compare the actual monthly and long-term economics of both.
If you're VA-eligible, VA should generally be included in the comparison. Its lack of monthly mortgage insurance and potential for 0% down can be powerful, while conventional may make more sense in certain equity, pricing, property, or transaction scenarios. Compare the actual structures rather than choosing based on the loan label.
Yes. Conventional financing can be an efficient option for eligible 1–4 unit rental properties when the borrower's documented income and portfolio fit agency requirements — sometimes with as little as 15% down on certain 1-unit purchases.