FHA next to conventional. Five percent down next to ten. A builder incentive next to a standard offer. The point isn't to crown a winner — it's to see what each choice actually costs you monthly and at the closing table.
Sharing an estimate is genuinely useful: emailing it to yourself, a spouse, your Realtor, or your builder means everyone is working from the same numbers, and the next conversation starts further along.
Before you start
This tool estimates the monthly payment and the cash needed at closing for up to three financing scenarios on the same home, so you can see the tradeoff between paying more upfront and paying more each month.
What we're assuming
—A fixed-rate loan for the full term shown — no adjustable-rate or interest-only structures.
—Closing costs and prepaid items estimated as a percentage of the purchase price.
—FHA scenarios include the upfront mortgage insurance premium financed into the loan, plus monthly MIP.
—Conventional mortgage insurance is estimated when the down payment is under 20% and drops off at 80% loan-to-value.
—Taxes and insurance are annual figures you enter, divided evenly across twelve months.
What could change the result
—Your credit profile, debt-to-income ratio, and documented income.
—The actual property taxes and homeowners insurance for the specific address.
—HOA dues, transfer taxes, and county-specific fees.
—Where rates sit the day you lock — they move daily, sometimes more than once.
—Seller or builder credits, which are negotiated and not guaranteed.
Rates, taxes, insurance, and program guidelines change, and every file is underwritten on its own facts. Treat everything here as a starting point for a conversation — not a quote, an approval, or a commitment to lend.
The home
Side by side
Every figure below is an estimate on a $425,000 purchase price.
Estimated monthly payment and cash to close by scenario
Scenario
Monthly payment
Cash to close
Notes
FHA3.5% down · 6.5% · 30-year
$3,412
$27,625
Lower down payment$2,638 principal & interest · $583 taxes & insurance · $191 mortgage insurance
Builder incentive estimates $359 per month less than FHA — about $4,308 over a year. That gap only matters if the rest of the picture holds: the rate, the taxes, and the insurance are all estimates.
Cash at the table
Builder incentive asks for roughly $8,000 less at closing than Conventional. Cash you keep is cash available for repairs, furniture, or reserves — which underwriting also looks at.
Mortgage insurance
FHA, Conventional, and Builder incentive include estimated mortgage insurance. Conventional mortgage insurance generally ends once the loan reaches 80% of value; FHA mortgage insurance usually stays for the life of the loan when the down payment is under 10%.
None of these is automatically the right answer. A lower payment can cost more upfront; a lower cash requirement can cost more every month for years. The right choice depends on how long you plan to stay, what else you need that cash for, and how much room you want in your monthly budget.
Optional. The charts show the same numbers as the table, broken into their parts.
What's driving the difference
Each scenario below is measured against FHA. To isolate an input, we re-price FHA with only that one value changed — so you can see what each assumption is actually worth.
Conventional vs FHA
−$35 per month · +$6,375 at closing
Down payment
5% vs 3.5% down
−$44 monthly · +$6,375 cash
More money down means a smaller loan, a smaller payment, and often less mortgage insurance — but it also means more cash out of pocket at the closing table.
Interest rate
6.625% vs 6.5%
+$35 monthly · No change cash
The rate sets the principal and interest payment. On a loan this size, a quarter point typically moves the payment by a meaningful amount every month for as long as you keep the loan.
Loan program
Conventional vs FHA
+$20 monthly · No change cash
Program rules decide how mortgage insurance is calculated, whether an upfront premium is financed into the loan, and how long that insurance stays on the payment.
Builder incentive vs FHA
−$359 per month · −$1,625 at closing
Interest rate
5.375% vs 6.5%
−$301 monthly · No change cash
The rate sets the principal and interest payment. On a loan this size, a quarter point typically moves the payment by a meaningful amount every month for as long as you keep the loan.
Down payment
5% vs 3.5% down
−$44 monthly · +$6,375 cash
More money down means a smaller loan, a smaller payment, and often less mortgage insurance — but it also means more cash out of pocket at the closing table.
Seller or builder credit
$8,000 vs none
No change monthly · −$8,000 cash
A negotiated credit reduces the cash you bring to closing, or can be applied to buy the interest rate down instead.
Loan program
Conventional vs FHA
+$20 monthly · No change cash
Program rules decide how mortgage insurance is calculated, whether an upfront premium is financed into the loan, and how long that insurance stays on the payment.
The individual impacts are estimates measured one at a time, so they will not always add up exactly to the total difference — changing the down payment, for example, also changes the mortgage insurance. The point is the relative weight: which assumption is doing most of the work.
Mortgage insuranceMonthly, until the loan reaches the threshold for removal
$209
Key assumptions
—Purchase price of $425,000 with 3% estimated closing costs and prepaids.
—$8,000 in seller or builder credit applied to closing costs.
—Fixed rate held for the full term; taxes and insurance divided evenly by month.
What should you do next?
Pick the line that sounds most like you. Each one points to something worth reading before any conversation about your own file.
Ready to buy in the next few months
A pre-approval turns these estimates into real numbers, and it is what makes an offer credible. It is a conversation and a document review, not a commitment.
Run the same home through two or three scenarios above, then look at the total cash difference against the monthly difference. That ratio usually makes the decision obvious.
New construction financing has its own timeline: rate locks, draw schedules, and a delivery date that can move. The construction calculator models the payment during the build and after conversion.
Program fit usually comes down to credit, down payment source, and property type — not to which one advertises the lowest rate. That is a fifteen-minute conversation.
Changing your down payment moves two numbers at once — the cash you need at closing and the payment you make every month. Looking at either one alone hides half the decision.
02
Property taxes vary widely by municipality and school district, and they are often the largest difference between two similar homes in the same county.
03
Interest rates change daily, sometimes more than once a day. Any rate shown here is an assumption, not an offer.
04
The right loan isn't always the one with the lowest payment. Program rules, mortgage insurance removal, and how long you plan to stay all matter.
05
A seller or builder credit is negotiated. It can lower your cash to close or buy the rate down, but it is never guaranteed until it is in the contract.
06
FHA loans finance an upfront mortgage insurance premium into the loan, so the loan amount is slightly higher than the purchase price minus the down payment.
Before you decide
Common misconceptions
A few things people hear often about mortgages. None of them are simply true or false — each one depends on your goals, your qualifications, and your circumstances. The point here is to help you ask better questions, not to steer you toward any particular loan.
01
“My rate is set as soon as I'm pre-approved.”
A pre-approval is a review of your credit, income, and assets — it establishes what you can borrow, not the rate you will pay. The rate is set when you lock, which typically happens once you have a property under contract. On new construction the timing question is bigger, because delivery dates move and lock periods have limits. Extended locks and float-down options exist, and each has a cost and a tradeoff.
Worth asking When should I lock given my timeline, and what are my options if the date moves?
02
“You need perfect credit to get a mortgage.”
Credit matters — it influences your rate, your mortgage insurance, and which programs are open to you. But the bar for approval is lower than most people assume, and different programs weigh credit differently. It is also often true that a modest, targeted change to a credit profile moves someone into better pricing. That is worth knowing before you decide you aren't ready.
Worth asking Where does my credit put me today, and is there anything simple that would improve my pricing?
03
“The lowest monthly payment is always the best choice.”
A lower payment is real money back in your budget every month, and for a lot of buyers that matters more than anything else. It just isn't the whole picture. The same payment can come from a longer term, a smaller down payment with mortgage insurance attached, or points paid up front — each of which changes what the loan costs you over time. Whether the lowest payment is the best choice depends on how long you expect to stay, what else you want that money doing, and how the rest of the loan is structured.
Worth asking What does each of these options cost me over the years I actually plan to be in the home?
04
“You always need a 20% down payment.”
Twenty percent has a real advantage: it generally avoids monthly mortgage insurance on a conventional loan. But it has never been a requirement to buy. Many qualified buyers purchase with 3%, 3.5%, or 5% down, and some programs allow less. What is available to you depends on the loan program, your credit profile, the property type, and where the funds come from. The tradeoff is straightforward — less cash at the table usually means a higher payment.
Worth asking What would my numbers look like at 3%, 5%, 10%, and 20% down side by side?
If any of these apply to your situation, they are good things to talk through before you choose a direction. There is rarely one right answer — there is the answer that fits what you are trying to do.
Explore
What happens if…
These are estimates, so experiment freely. Each question below shows roughly what it would do to the payment before you try it — tap one and every scenario above updates together.
These are estimates, and nothing here is a commitment. Nothing is saved, submitted, or shared, and there is no wrong combination to try — explore as freely as you like. If a scenario starts to look like your actual plan, or you simply have a question about what you are seeing, personalized guidance is always available: Corie is happy to walk through it with you.
Why this changed
Because you increased the interest rate on every scenario from 6.17% to 6.67%, each scenario has to charge more interest on the same loan amount, so the principal-and-interest portion of the payment rises even though the price and your down payment did not move. For the numbers you entered, that works out to about $127 more a month on the lowest-payment option — nothing else in the estimate changed. In practice, the same house, a different market.
Before and after: the interest rate on every scenario changes from 6.17% to 6.67%.Before 6.17% → After 6.67%
Why this changed
Because you lowered the interest rate on every scenario from 6.17% to 5.67%, the same loan amount costs less in interest each month, so the payment falls while your cash to close stays essentially where it was. For the numbers you entered, that works out to about $124 less a month on the lowest-payment option — nothing else in the estimate changed.
Before and after: the interest rate on every scenario changes from 6.17% to 5.67%.Before 6.17% → After 5.67%
Why this changed
Because you increased your down payment from 4.5% to 10%, you are financing less of the same purchase price, so the estimated loan amount drops — that lowers the monthly payment and the mortgage insurance, while asking for more cash at closing. For the numbers you entered, that works out to about $168 less a month on the lowest-payment option — nothing else in the estimate changed. In practice, more cash at closing, less financed.
Before and after: your down payment changes from 4.5% to 10%.Before 4.5% → After 10%
Why this changed
Because you increased your down payment from 4.5% to 20%, the loan amount drops further and a conventional loan generally no longer needs monthly mortgage insurance, so both pieces of the payment come down while more of your savings goes in at closing. For the numbers you entered, that works out to about $566 less a month on the lowest-payment option — nothing else in the estimate changed. In practice, generally removes conventional mortgage insurance.
Before and after: your down payment changes from 4.5% to 20%.Before 4.5% → After 20%
Why this changed
Because you lowered the purchase price from $425,000 to $400,000, every figure that is calculated off the price follows it down — your down payment in dollars, the loan amount, and the payment all shrink together. For the numbers you entered, that works out to about $145 less a month on the lowest-payment option — nothing else in the estimate changed.
Before and after: the purchase price changes from $425,000 to $400,000.Before $425,000 → After $400,000
Why this changed
Because you increased the purchase price from $425,000 to $450,000, the same down payment percentage now covers a bigger number, so you finance more and bring more to closing — the payment moves on both counts. For the numbers you entered, that works out to about $145 more a month on the lowest-payment option — nothing else in the estimate changed.
Before and after: the purchase price changes from $425,000 to $450,000.Before $425,000 → After $450,000
Why this changed
Because you lowered the loan term from 30 years to 15 years, the same loan amount is repaid over far fewer months, so more principal is due every month — the payment goes up, but you pay much less interest overall. For the numbers you entered, that works out to about $1,011 more a month on the lowest-payment option — nothing else in the estimate changed. In practice, higher payment, far less interest over time.
Before and after: the loan term changes from 30 years to 15 years.Before 30 years → After 15 years
Why this changed
Because you increased the seller or builder credit from $2,667 to $12,667, that credit is applied toward your closing costs, so it reduces the estimated cash you need at closing and makes the option cheaper upfront — it does not shrink the loan, so the monthly payment stays about the same — but in your scenario it barely moves the a month on the lowest-payment option. That tells you the seller or builder credit is not what is driving your numbers right now; something else you entered matters more.
Before and after: the seller or builder credit changes from $2,667 to $12,667.Before $2,667 → After $12,667
Why this changed
Because you increased the annual property tax estimate from $5,400 to $6,600, taxes are collected monthly through escrow, so a higher assessment raises the escrow portion of your payment even though the loan itself is untouched. For the numbers you entered, that works out to about $100 more a month on the lowest-payment option — nothing else in the estimate changed. In practice, escrow changes even when the loan does not.
Before and after: the annual property tax estimate changes from $5,400 to $6,600.Before $5,400 → After $6,600
The link reopens these exact assumptions, and the PDF is generated on your own device — nothing is submitted or saved to anyone else.
In closing
Your mortgage decision summary
Based on the information you entered for a $425,000 home, you've explored how your down payment, interest rate assumptions, and estimated cash-to-close requirements change what these options look like side by side. The estimates differ by $359 a month and $8,000 at the closing table.
Builder incentive currently estimates lower on both the monthly payment and the cash required at closing. That can happen, and when it does the remaining questions are usually about eligibility, timing, and what each option costs over the years you actually plan to own the home — not about the numbers on this page.
A builder or seller credit is applied in Builder incentive, which is why the upfront numbers move more than the payment does. Incentives tend to change what you bring to closing; the loan structure behind them is what shapes the payment for years afterward.
Key takeaways
01
A $359 monthly difference is roughly $4,308 a year — worth weighing against the $8,000 difference in what you'd bring to closing.
02
Preserving cash after closing can matter more than it looks like on paper — moving costs, furnishings, repairs, and the first tax bill all arrive early.
03
You compared FHA and Conventional. Different programs prioritize different goals, and eligibility, mortgage insurance rules, and property requirements often decide the fit before pricing does.
04
Every scenario here includes mortgage insurance. It's a real cost, and it's also often what makes buying sooner possible — the tradeoff is worth naming out loud.
05
The lowest interest rate doesn't automatically produce the lowest overall cost. Points, fees, and how long you keep the loan all feed into the real answer.
What would you like to do next?
There's no next step you have to take. Keep exploring, save what you've built, or talk it through — whichever is genuinely useful to you right now.
A note from Corie
A mortgage is more than a monthly payment.
It's a financial decision that should support your goals, your family, and your future.
My hope is that these tools help you better understand your options. If you ever have questions, I'd be honored to help you think through them.
Corie Adams · Corie Adams Lending Team · NMLS #1875205
Ask Corie about this estimate
Have a question about these numbers?
Every homebuyer's situation is different.
Sometimes the best choice isn't the one with the lowest payment. Let's compare the tradeoffs together.
Whether you're comparing loan options, buying your first home, building a new home, or simply planning ahead, we can review your scenario together.
No pressure. No obligation. Just clear answers to help you make an informed decision.
All figures are estimates for educational purposes and are not a loan estimate, a rate quote, a pre-approval, or a commitment to lend. Actual terms depend on a complete application, credit review, property appraisal, and program guidelines in effect at the time of lock. Corie Adams, NMLS #1875205 · Network Funding LP, NMLS #2297 · Equal Housing Opportunity.