A conventional fixed rate mortgage is the most common home loan in America — and for good reason. Your interest rate is locked in at closing and never changes, which means your principal and interest payment stays the same for the entire life of the loan. No surprises, no rate adjustments, just predictable payments you can plan around.

At First Commerce Financial, we shop your conventional loan across dozens of wholesale lenders to find the lowest rate available for your specific situation — with no junk fees and complete transparency on costs. We serve buyers and homeowners across Michigan, Arizona, Florida, and Texas.

What Is a Conventional Loan?

A conventional loan is any mortgage not backed by a government agency (unlike FHA, VA, or USDA loans). Most conventional loans follow guidelines set by Fannie Mae or Freddie Mac, which allows them to be sold on the secondary market. This creates a large, competitive market for conventional financing — which typically means competitive rates for qualified borrowers.

Fixed Rate Loan Terms

Conventional fixed rate mortgages are available in several term lengths. The most common are:

30-Year Fixed

The most popular choice for home buyers. Spreading payments over 30 years results in the lowest monthly payment, which maximizes buying power and cash flow flexibility. You’ll pay more total interest over the life of the loan compared to shorter terms, but the lower payment gives you room to invest the difference or handle other financial priorities.

20-Year Fixed

A middle ground between the 15 and 30-year options. You’ll pay off your home in 20 years with a lower rate than the 30-year, and a lower payment than the 15-year. Often overlooked but worth considering.

15-Year Fixed

The 15-year fixed typically comes with a lower interest rate than the 30-year — usually 0.5%-0.75% lower. You’ll build equity faster and pay significantly less total interest, but your monthly payment will be higher. A great option if you can comfortably handle the payment and want to be mortgage-free sooner.

Conventional Loan Requirements

Down Payment

• As low as 3% for first-time buyers (Fannie Mae HomeReady or Freddie Mac Home Possible)
• 5% for repeat buyers on most conventional programs
• 20% eliminates PMI entirely

Credit Score

• Minimum 620 to qualify
• 720+ gets the best rates
• Every 20-point improvement in your score can meaningfully impact your rate

Private Mortgage Insurance (PMI)

If you put less than 20% down on a conventional loan, you’ll pay PMI — typically 0.5%-1.5% of the loan amount annually. The key advantage over FHA: PMI automatically cancels once you reach 20% equity, or you can request cancellation at 20% based on original value.

Debt-to-Income Ratio

Most conventional loans allow up to 45% DTI, with some programs going to 50% for strong borrowers. We’ll calculate yours upfront so you know exactly where you stand.

Conventional vs. FHA — Which Is Right for You?

The right choice depends on your credit score, down payment, and long-term plans:

• Credit score 620-679: FHA may offer a better rate; conventional PMI costs can be higher for lower credit scores
• Credit score 680+: Conventional typically wins on total cost
• Down payment 20%+: Conventional is almost always better — no PMI, no upfront insurance premium
• Long-term homeowner: Conventional PMI drops off; FHA MIP stays for life of loan if less than 10% down

We’ll run both scenarios side by side so you can see exactly which loan type saves you more money for your specific situation.

Conventional Loans in Michigan, Arizona, Florida & Texas

Conventional loans are available in all four states we serve and work well across a wide range of purchase prices and property types — from starter homes in the Detroit suburbs to move-up properties in the Phoenix East Valley to waterfront homes in Florida. Whatever market you’re buying in, we’ll find you the best conventional rate available.

Frequently Asked Questions

What’s the difference between conventional and conforming?

A conforming loan is a conventional loan that falls within Fannie Mae/Freddie Mac loan limits — currently $806,500 for a single-family home in most markets. Loans above that limit are conventional but non-conforming (jumbo). Most buyers are in conforming territory.

Can I put less than 20% down on a conventional loan?

Yes — you can put as little as 3% down on some conventional programs. You’ll pay PMI until you reach 20% equity, but PMI is cancellable — unlike FHA mortgage insurance which stays for the life of the loan if you put less than 10% down.

Can I pay off a conventional loan early?

Yes. Most conventional loans have no prepayment penalty, so you can make extra payments or pay off the loan in full at any time without fees.

What property types are eligible for conventional loans?

Single-family homes, condos, townhouses, and 2-4 unit properties all qualify for conventional financing. Investment properties and second homes are also eligible, though with higher down payment requirements.

How do I get the best conventional rate?

The biggest factors are your credit score, down payment, loan amount, and property type. Working with an independent broker like First Commerce Financial means we shop multiple wholesale lenders to find the lowest rate available for your exact scenario — not just whatever one bank is offering that day.

Let’s Find Your Best Rate

A conventional fixed rate mortgage is a great loan — and getting the best rate on one requires shopping the market. That’s exactly what we do.

Licensed in Michigan, Arizona, Florida, and Texas.

📞 Call us at (248) 459-5511

✅ Or get pre-approved online — we’ll have your rate options fast.