Conventional vs Jumbo Mortgage
Conventional loans are conforming Fannie/Freddie products that fit within county loan limits ($766,550 in most counties for 2024). Jumbo loans exceed those limits. Pricing has compressed in recent years — sometimes jumbo is even cheaper than conventional — but reserves, down payment, and FICO requirements differ.
Conventional Mortgage
Conforming Fannie/Freddie loan within county limits.
Best for: Most US borrowers — homes priced below the conforming limit in your county.
Pros
- +3% down payment available
- +PMI removable at 20% equity
- +Standardized underwriting
Cons
- −Limited to conforming loan amount in your county
Jumbo Mortgage
Loan amount above the county conforming limit.
Best for: High-priced markets and luxury homes above the conforming limit.
Pros
- +Loan amounts up to $3M+ standard
- +Often competitive with conventional rate
- +15% down available with strong credit
Cons
- −Higher reserves required (6–12 months)
- −Stricter FICO and DTI
- −Some lenders require 20%+ down
| Field | Conventional Mortgage | Jumbo Mortgage |
|---|---|---|
| Min FICO | 620+ (680+ for best pricing) | 680+ (700+ standard) |
| LTV (purchase) | Up to 97% | Up to 89.99% (typically 80%) |
| LTV (cash-out) | Up to 80% | Up to 75% |
| Income docs | Standard | Standard + asset verification |
| Term | 30-year fixed, 15-year, ARM | 30-year fixed, ARM |
| Time to close | 30–45 days | 30–45 days |
Which one should you choose?
- Conventional Mortgage: choose conventional if loan amount fits within the conforming limit. Lower down payment, simpler underwriting.
- Jumbo Mortgage: choose jumbo when the home price requires a loan above the conforming limit. Compare to a piggyback (conventional + HELOC) to keep loan amount under conforming.
- In high-cost counties, conforming limits are higher (up to ~$1.15M). Check your county before assuming jumbo applies.
Frequently asked questions
What is a "high-balance" conforming loan?
In high-cost counties, the conforming limit is raised (up to $1.15M for 2024). High-balance conforming has a small rate adjuster but is still conforming, not jumbo.
Are jumbo rates always higher than conventional?
Not anymore. In recent years, jumbo rates have sometimes been below conforming rates because of strong portfolio investor demand. Always price both.
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Related
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Asset-Qualifying
Asset-qualifying (asset depletion) mortgages let high-net-worth borrowers qualify using liquid assets in lieu of income. Ideal for retirees and investors.
FHA vs Conventional
FHA or conventional mortgage? Compare down payment, FICO, MIP/PMI, loan limits, and which fits your scenario as a homebuyer.
Today's mortgage rates
Conventional
5.875%
5.911% APR
FHA
5.250%
5.278% APR
VA
5.250%
5.275% APR
Conv: 80% LTV, 780 FICO. FHA: 96.5% LTV, 680 FICO. VA: 100% LTV, 680 FICO. 30-yr fixed. Your rate may vary.