FHA vs Conventional With 5% Down
The right answer depends on your situation — here is a side-by-side look at fha vs conventional with 5% down for 2026, with the real figures.
At 5% down the comparison narrows. Conventional PMI at 5% down is risk-based on credit; with strong credit it can undercut FHA's MIP, and it cancels at 20% equity.
| Factor | FHA | Conventional 5% down |
|---|---|---|
| Down payment | 3.5% | 5% |
| MI cost (good credit) | 0.55% MIP | Often lower PMI |
| MI ends | Loan life | At 20% equity |
| Min score | 580 | 620 |
The bottom line
With 5% down and 680+ credit, conventional typically beats FHA over time.
Run both options with a lender before deciding — the right choice can shift by a few thousand dollars depending on your exact credit score, down payment, and how long you plan to stay in the home.
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Frequently Asked Questions
- FHA vs Conventional With 5% Down — which is better in 2026?
- With 5% down and 680+ credit, conventional typically beats FHA over time.
- Can I switch later?
- Yes. Many borrowers start with FHA and refinance into another loan once their credit and equity improve, which can also remove FHA mortgage insurance.