Both the 30 Year Fixed Conventional and FHA loan rates dropped even lower this week.  These rates are now pressing against some of the best rates of all time, set almost exactly one year ago.

FHA vs. Conventional

We’re going to look at another comparison.  We’ll focus on a 700 FICO score, 5% down payment, and we’re assuming a single-family residence.  We’ve used a price of $300,000 for both examples.

Monthly Payment

In terms of monthly payment, the FHA mortgage nearly always is cheaper for the 700 FICO score borrower.

This is largely because the PMI is .94%.  That should be read and referred to as a percentage.  Since the FHA PMI is only .5% in this scenario, the conventional loan’s effective rate is roughly .3% higher.  The Conventional PMI is .44% higher and the interest rate is .125% lower.   Jump to the end of the article for the full data.

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The FHA Loan Rates continue to trade within just a narrow margin relative to conforming.  With credit scores driving the conventional mortgage rate and the associated PMI, here’s a comparison of how the FHA vs. Conventional dynamic changes based on credit score.

Today’s example uses a $300,000 home at 5% down.  The FHA mortgage rate won’t change, nor will the monthly mortgage insurance.   Here’s a look at the data:

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