Direct Answer
For a $300,000 home, a VA (U.S. Department of Veterans Affairs) loan is the most affordable, requiring $0 down and $0 monthly insurance. A conventional loan at 6.5% with 5% down costs about $2,137/month (including PMI), while an FHA (Federal Housing Administration) loan at 6.25% with 3.5% down costs about $2,168/month (including MIP). VA loans save the most upfront cash and monthly cost; Conventional loans save the most over 30 years if you can reach 20% equity; FHA loans are the most accessible for borrowers with credit scores below 620. Use the Mortgage Calculator to model your specific loan type.
Last verified on: June 4, 2026
Editorial note: This comparison uses mid-2026 rate data for FHA, Conventional, and VA 30-year fixed loans. Actual rates and insurance premiums vary by lender, credit score, LTV (loan-to-value ratio), and loan amount. This guide does not cover jumbo loans or portfolio products.
Research method: Daily Calcs reviewed HUD FHA guidelines, VA Loan Guaranty Handbook, Fannie Mae/Freddie Mac conventional standards, and current rate spreads from Freddie Mac PMMS (Primary Mortgage Market Survey, late May 2026). All sources verified on June 4, 2026.
Side-by-Side Loan Comparison
| Feature | Conventional | FHA (Federal Housing Administration) | VA (U.S. Department of Veterans Affairs) |
|---|---|---|---|
| Min Down Payment | 3% | 3.5% | 0% |
| Min Credit Score | 620 | 580 | Varies (usually 580-620) |
| Monthly Insurance | PMI (Cancelable) | MIP (Lifelong with under 10% down) | None |
| Upfront Fees | None | 1.75% Upfront MIP | Funding Fee (can be waived) |
| Best For… | High credit, 5%+ down | Low credit, limited cash | Veterans and active military |
PMI (private mortgage insurance) and MIP (mortgage insurance premium) protect the lender, not the borrower. LTV (loan-to-value ratio) determines your insurance rate.
Total Cost Comparison: $300,000 Home
Scenario: 30-year fixed, typical mid-2026 rates
| Loan Type | Down Payment | Monthly P&I + Insurance | Total cost over 30 years | Upfront Cash Needed |
|---|---|---|---|---|
| VA Loan | $0 | $1,896 | $682,560 | $0 (plus closing costs) |
| Conventional | $15,000 (5%) | $2,137 | $647,640 | $15,000 |
| FHA Loan | $10,500 (3.5%) | $2,168 | $680,760 | $15,563 (incl. MIP) |
Conventional loan total cost is lowest over 30 years because PMI drops off at 80% LTV. F uma la loan totals are higher due to lifelong MIP and 0% down principal.
When to Choose Each Loan Type
1. Choose a VA Loan if you are eligible
If you are a veteran or active-duty service member, the VA loan is almost always the superior choice. The 0% down payment and absence of monthly mortgage insurance create a massive monthly and upfront advantage.
2. Choose a Conventional Loan if you have 660+ credit
Conventional loans are best for those with a healthy credit score and at least 3%-5% down. The primary advantage is the ability to cancel PMI once you reach 20% equity. This makes conventional loans cheaper than FHA loans over the long term.
3. Choose an FHA Loan if you have a credit score under 620
FHA loans are designed for accessibility. If your FICO (Fair Isaac Company) score is between 580 and 620, or if you have a limited down payment, FHA is often the only viable path to homeownership. While the MIP is expensive, it allows you to enter the market sooner.
The “Insurance Trap”: PMI vs. MIP vs. Funding Fee
Understanding the “insurance” part of your payment is key to long-term savings:
- PMI (private mortgage insurance): Used in conventional loans. It can be canceled once your LTV (loan-to-value) reaches 80%.
- MIP (mortgage insurance premium): Used in FHA loans. If you put down less than 10%, MIP stays for the life of the loan. The only way to remove it is to refinance into a conventional loan.
- VA Funding Fee: A one-time fee paid to the VA to guarantee the loan. It can be rolled into the loan balance, meaning you don’t pay it upfront, but you pay interest on it.
Calculator Methodology
The comparison uses:
- home price: $300,000
- Conventional: 6.5% rate, 5% down, 0.65% PMI
- FHA: 6.25% rate, 3.5% down, 0.55% MIP + 1.75% upfront MIP
- VA: 6.5% rate, 0% down, no monthly insurance
- All scenarios assume a 30-year fixed term and $100/month homeowners insurance.
Standard amortization formula:
Payment = P * r(1 + r)^n / ((1 + r)^n − 1)Official and Supporting Sources
- HUD: FHA Loan Requirements
- VA.gov: VA Home Loan Benefits
- Fannie Mae: Conventional Loan Guidelines
- Freddie Mac PMMS (Primary Mortgage Market Survey), late May 2026
- Daily Calcs Mortgage Calculator
- FHA vs. Conventional Loan — which is cheaper?
- Home Affordability Calculator
Next Step
Use the Mortgage Calculator to compare different loan types and down payments. Then, check if your income supports the loan with the Home Affordability Calculator.
Frequently Asked Questions
For a $300,000 home, a VA (U.S. Department of Veterans Affairs) loan is almost always the cheapest because it allows 0% down and has no monthly mortgage insurance. A conventional loan is the second cheapest long-term because PMI (private mortgage insurance) can be canceled. An FHA (Federal Housing Administration) loan is the most accessible for low credit scores but the most expensive over 30 years due to lifelong MIP (mortgage insurance premium).
No. VA loans are exclusively for active-duty military, veterans, and eligible surviving spouses. If you are not eligible, you must choose between a conventional loan (best for higher credit/down payments) or an FHA loan (best for lower credit/down payments).
Conventional loans are best for borrowers with a 660+ FICO score and at least 5% down. They offer the lowest lifetime cost because you can remove PMI once you reach 20% equity.
FHA loans are the most flexible, often allowing scores as low as 580 (with 3.5% down). Conventional loans typically require 620+, though some programs allow 600. VA loans have no official government minimum, but individual lenders typically require 580-620.
No. VA loans do not have monthly mortgage insurance (PMI or MIP). They do have a one-time VA Funding Fee, which can be rolled into the loan or waived for disabled veterans.
VA loans are best (0% down). If ineligible, FHA is next best (3.5% down). Conventional loans can go as low as 3% for first-time buyers, but they often require higher credit scores to avoid expensive PMI.
Related guides
- FHA vs. Conventional Loan 2026 — Which Is Cheaper? Compare FHA vs conventional loans in 2026 with real dollar examples. See how MIP vs PMI, down payment, and rate affect your total monthly payment.
- Closing Costs Explained — What to Expect in 2026 How much closing costs really are in 2026. On a $300k home, expect $6k to $18k. See what each fee covers and how to reduce your total.
- First-Time Homebuyer Programs 2026 — DPAs by State Down payment assistance programs in all 50 states. See grants up to $148k in California, zero-interest loans, and what you qualify for in 2026.
- How to Remove PMI in 2026 and Save Thousands on Interest Remove PMI on your conventional loan in 2026. CFPB rules for 80% LTV cancellation, how extra payments accelerate removal, and how much you could save.
- How Mortgage Rates Affect Your Monthly Payment in 2026 See how a 1% rate change adds or subtracts $175 per month on a $300,000 loan. Rate scenarios from 4.5% to 7.5% for every $100k borrowed.