FHA or conventional, the mortgage insurance is the decision

A conventional loan with less than twenty per cent down carries private mortgage insurance, and that insurance is cancellable. Once the loan reaches the threshold the lender is obliged to drop it, and you can ask earlier if the property has appreciated. It is a temporary cost with a defined end.

FHA is a different arrangement. Under ten per cent down, its mortgage insurance premium lasts the life of the loan. It does not fall away when you reach an equity level, because it is not priced on your equity. It is what makes the wider credit box possible in the first place.

It is not only a rate question. A quoted rate on one and a quoted rate on the other, with the insurance left out, will point at the wrong loan more often than not.

And it is not a permanent decision. Refinancing out of FHA once credit and equity allow it is a normal and common path, but it is a second set of costs, so it belongs in the plan from the start rather than as a surprise later.