Today's Conventional Loans Rates
Conventional loans are the most common type of mortgage in America, not insured or guaranteed by any government agency. Available in multiple term lengths, conventional loans offer competitive rates, flexible down payment options starting at 3%, and the ability to cancel private mortgage insurance once you reach 20% equity.
* Estimated monthly payment based on a $400,000 loan amount. Assumes Rates assume 780+ credit, 75% LTV, primary residence, single-family home.. Your actual rate and payment may differ. Subject to credit approval.
What Is a Conventional Loan?
A conventional loan is a mortgage that isn't insured or guaranteed by a federal government agency like the FHA, VA, or USDA. Instead, conventional loans follow guidelines set by Fannie Mae and Freddie Mac (Government-Sponsored Enterprises). These loans come in fixed-rate and adjustable-rate varieties, with terms ranging from 10 to 30 years. Because they're not government-backed, conventional loans typically require higher credit scores — but they also offer significant advantages, including removable mortgage insurance and no upfront funding fees.
Who Qualifies?
Conventional loans generally require a minimum credit score of 620, though a score of 740 or higher will get you the best available rates. You'll need a debt-to-income ratio below 45% (ideally under 36%). Down payments start at just 3% for first-time buyers through programs like HomeReady and Home Possible, though putting down 20% eliminates the need for PMI entirely. Stable employment history (typically 2+ years) and documented income are required.
Pros and Cons
Advantages
- ✓PMI can be canceled once you reach 20% equity — unlike FHA MIP
- ✓No upfront mortgage insurance premium or funding fee
- ✓Multiple term options: 10, 15, 20, 25, and 30-year fixed
- ✓Higher loan limits than FHA — up to $806,500 in most areas (2026)
- ✓Available for primary homes, second homes, and investment properties
- ✓Potentially lower total cost over the life of the loan vs. FHA
Considerations
- ✗Higher credit score requirements (620+ minimum, 740+ for best rates)
- ✗PMI required if down payment is less than 20%
- ✗Stricter debt-to-income ratio requirements
- ✗May require larger cash reserves than government-backed loans
How to Apply
Getting a conventional loan starts with a thorough financial review. Gather your documents: two years of W-2s or tax returns, recent pay stubs, two months of bank statements, and photo ID. CMS Mortgage offers a fast pre-approval process that tells you exactly how much you can borrow. We'll compare 30-year, 20-year, and 15-year options side by side so you can choose the term that fits your budget and goals. Our team handles everything from application through closing.
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