VA vs. FHA vs. Conventional: The Real Comparison
Which loan wins depends on down payment, credit, and how long you'll own. Here's the head-to-head math.
Down payment
VA: $0. FHA: 3.5%. Conventional: 3% (first-time buyers) or 5%+.
On a $400K home: VA saves $12K–$20K in cash at closing vs. the alternatives.
Mortgage insurance
VA: none, ever. FHA: MIP for the life of the loan (unless you put 10%+ down, then 11 years). Conventional: PMI until you hit 20% equity.
This is the single biggest lifetime cost advantage of the VA loan.
Rates and up-front fees
VA and FHA typically price a hair below conventional. VA has the funding fee (financed); FHA has the up-front MIP (also financed).
Over 30 years, VA wins on total cost for almost every veteran borrower.
The narrow band where conventional wins
20%+ down, 780+ credit, planning to sell within 5 years, funding-fee-non-exempt: conventional can occasionally edge VA on total cost.
For everyone else, VA wins.
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