Why Conventional Is King
Conventional loans are the most popular mortgage in America for a reason. They offer the best rates, the most flexibility, and the lowest long-term cost for borrowers with credit scores above 620. They're backed by Fannie Mae and Freddie Mac, which means standardized terms, competitive pricing, and broad lender availability.
Down Payment Options
- 3% down — Conventional 97 and HomeReady/Home Possible programs for first-time buyers and low-to-moderate income borrowers
- 5% down — Standard conventional with PMI
- 10% down — Lower PMI, better rates
- 20% down — No PMI required. The sweet spot for rate and monthly payment.
PMI drops off automatically when your equity reaches 22%, or you can request removal at 20%. Unlike FHA, you don't pay mortgage insurance for the life of the loan.
Who Should Choose Conventional?
- Credit score 680+ (you'll get the best rates)
- Stable employment with verifiable income (W-2 or consistent self-employment)
- At least 3-5% down payment saved
- Debt-to-income ratio under 45%
- Buying a primary residence, second home, or investment property
Rate Options
- 30-year fixed — Lowest monthly payment. Most popular.
- 15-year fixed — Higher payment but dramatically less interest over the life of the loan.
- 20-year fixed — The middle ground.
- 5/6 ARM — Fixed for 5 years, then adjusts every 6 months. Lower initial rate.
- 7/6 ARM — Fixed for 7 years. Good if you plan to move or refinance.
2026 Conforming Loan Limits
The 2026 conforming loan limit is $766,550 in most areas. High-cost areas (parts of CA, NY, HI, etc.) go up to $1,149,825. Above these limits, you'll need a jumbo loan.
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