You found the place. The price is the price. Now you have two quotes, one Conventional and one FHA, and each one shows a different monthly payment. It's hard to tell why from a quote sheet.
Only three things change between the two: the down payment, the mortgage insurance, and the rate you were quoted. Your property tax, homeowners insurance, and HOA dues are the same no matter which loan pays for the house.
What stays the same
- Home Price. Same house, same number.
- Annual Property Tax. Cook County bills the property, not the loan.
- Annual Insurance. Your homeowners policy covers the building. It doesn't care who the lender is.
- Monthly HOA. The association sends the same bill either way.
If any of those look different on your two quotes, ask why. One quote may have used a placeholder tax or insurance figure.
What changes
Down payment. You may be putting a different amount down on each loan. A different down payment means a different loan amount before anything else happens.
Upfront mortgage insurance on FHA. FHA charges an upfront mortgage insurance premium. Per HUD, it's currently 1.75% of the base loan amount. It can be rolled into the loan instead of paid in cash, and the calculator rolls it in. So the FHA loan amount is bigger than price minus down payment. You pay principal and interest on that bigger number.
Monthly mortgage insurance. On FHA it's an annual premium, figured on the base loan before the upfront premium is added, then split into twelve monthly pieces. HUD's current published figure for most 30-year FHA purchase loans is 0.55% a year with less than 5% down, or 0.50% with 5% or more down (Mortgagee Letter 2023-05). HUD can change these, so use the figure on your own quote. On Conventional, private mortgage insurance usually shows up when you put less than 20% down. PMI pricing varies by insurer and borrower, so the only PMI number that counts is the one on your quote.
The rate. Conventional and FHA are priced differently, so your two quotes probably show two different rates. Use each one in its own run. Nothing on this page is a BankPricer rate.
Run it both ways
Open the Purchase calculator.
Run one, Conventional.
- Loan Type. Pick Conventional.
- Home Price. Type the price you'd offer.
- Down Payment. Type what you'd put down on this loan. The $ / % toggle lets you enter dollars or a percent.
- Credit Score, Loan Term. Fill these to match your deal. Keep them the same in both runs.
- Starting rate assumption. Type the rate from your Conventional quote.
- Monthly HOA, Annual Property Tax, Annual Insurance. Type the real numbers for this house.
Write down four numbers: Loan Amount, Principal & Interest, PMI, and Total Monthly Payment.
Run two, FHA. Switch Loan Type to FHA. Change Down Payment to what you'd put down on the FHA loan. Change Starting rate assumption to the rate on your FHA quote. Leave everything else alone. The mortgage insurance line now reads FHA MIP, and the note under the results shows the upfront MIP the tool rolled into the loan. Write down the same four numbers.
A worked example (replace every number with yours)
These are example inputs only, to show the loan amount math. They are not a quote, and they are not a minimum or a requirement for any loan.
- Example Home Price: $400,000
- Example FHA down payment: 3.5%, which is $14,000. Base loan: $386,000. Upfront MIP at HUD's 1.75%: $6,755. Loan Amount the tool shows: $392,755.
- Example Conventional down payment: 5%, which is $20,000. Loan Amount: $380,000. No upfront premium added.
Same house, and the FHA loan is $12,755 bigger in this example. That gap is part of why the Principal & Interest line differs, before you even look at the two rates.
Reading the two runs
- Loan Amount. The FHA number includes the financed upfront MIP.
- Principal & Interest. Loan size and rate together.
- PMI vs FHA MIP. The tool estimates both from its own reference tables. There's no box to type the figure from your quote, so check this line against your quote. If they don't match, go with your quote.
- Property Tax, Homeowner's Insurance, HOA Fees. Should match in both runs. If they don't, a field changed by accident.
- Total Monthly Payment. The gap between the two runs is the monthly difference at your price and your two rates.
One thing to watch on Conventional: the tool may add a modeled adjustment to the rate you typed, and it shows that next to Effective rate. Your quote already reflects your pricing. If the adjustment shows up, trust the Principal & Interest on your quote over the tool's.
If you want a second pair of eyes
Bring both runs. Jeff Shin, NMLS #1041652, originates from Chicago with Barrett Financial Group, L.L.C. He can help you line up the two quotes, check the mortgage insurance figures, and see where the monthly gap really comes from.
A calculator result isn't a commitment to lend. A blog post can't lock a rate.
Jeff Shin, NMLS 1041652. Barrett Financial Group, L.L.C. Chicago. Equal Housing Lender. Not a commitment to lend.