Mortgage types by who backs the loan
| Type | Who it's for | Down payment | Mortgage insurance |
|---|---|---|---|
| Conventional | Most borrowers; the majority of loans | Some lenders offer 3%; 20% avoids PMI | Typically required with less than 20% down |
| FHA | Lower credit scores or small down payments | As low as 3.5% | Required on all FHA loans |
| VA | Eligible veterans, servicemembers and surviving spouses | Low or zero | No monthly premium; an upfront funding fee is usually due |
| USDA | Low- and moderate-income borrowers in eligible rural areas | Zero | Ongoing premiums plus an upfront fee |
Conventional loans typically cost less than FHA loans but can be harder to get. FHA loans can be the cheapest option for borrowers with lower credit scores or a smaller down payment; with strong credit and 10% to 15% down, FHA generally costs more than conventional. USDA loans are usually cheaper than FHA. VA loans can cost more than conventional if you have a large down payment and good credit.
Conventional loans: conforming and jumbo
A conforming loan is a conventional loan that fits the size limits set by the Federal Housing Finance Agency and the rules set by Fannie Mae and Freddie Mac. For 2026 the limit for a one-unit home is $832,750 in most of the U.S., up to $1,249,125 in high-cost areas. In Alaska, Hawaii, Guam and the U.S. Virgin Islands the baseline is $1,249,125.
A jumbo loan is larger than the conforming limit. Rules vary by lender, but they usually need good credit and a high down payment.
Fixed rate vs adjustable rate (ARM)
| Fixed rate | Adjustable rate (ARM) | |
|---|---|---|
| Rate | Stays the same for the whole loan | Fixed for an initial period, then changes with an index |
| Principal and interest payment | Never changes | Can rise a lot after the initial period |
| Starting rate | Usually higher | Usually lower |
| Risk | Lower | Higher |
In a 5/1 ARM, the first number is how many years the rate stays fixed and the second is how often it adjusts afterward (every year). Taxes and insurance can still change a fixed-rate payment if they're paid through escrow. Compare the two with the ARM calculator.
15-year vs 30-year terms
A 15-year loan has higher monthly payments but typically a lower rate, possibly by as much as a full percentage point, and much less total interest. A 30-year loan has lower payments and higher total cost. See the 15-year vs 30-year comparison.
Interest-only and balloon features
The CFPB lists these among risky loan features to ask about.
- Interest-only: for a set period you pay only interest, so the balance doesn't go down. Afterward you must pay off the balance, refinance, or start much higher payments.
- Balloon: regular payments don't fully repay the loan, leaving a large final payment. These loans usually run 5 to 10 years. Balloon payments aren't allowed in a Qualified Mortgage, with limited exceptions.
If a lender offers one of these, ask for a Loan Estimate without the feature so you can compare.
Compare payments
Use the mortgage calculator for any loan, the FHA loan calculator or VA loan calculator for government loans, and the PMI calculator to see what mortgage insurance adds.
Sources: CFPB: loan options; CFPB: conventional loans; CFPB: FHA loans; CFPB: VA and USDA loans; CFPB: down payments; FHFA: 2026 conforming loan limits; CFPB: key mortgage terms; CFPB: interest-only loans; CFPB: balloon payments.
Every worked example on this page was checked with Calcist's own engine and an independent reference.