View today's low rates for conventional loans and learn the difference between fixed-rate and adjustable-rate and which is right for you.

Conventional Purchase

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A Conventional Loan For Your Next Home Purchase

  • Low fixed or adjustable rates for qualified borrowers
  • Available for primary, second homes, investment properties
  • As little as 3% down
  • No mortgage insurance with 20% down

Today's Conventional Purchase Rates

See at a glance how VA IRRRL rates stack up today. Compare different mortgage loan types and learn more about how VA IRRRL can make your monthly mortgage payments more stable and affordable.

Please keep in mind that the mortgage rates shown above are based on certain assumptions, which may differ from your personal home loan scenario.

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Discount points apply, view assumptions for details. Rates valid on:
Wed, Jul 12 2017, 09:49 AM PT and are subject to change without notice. *Not all applications will be approved.

Please keep in mind that the mortgage rates shown above are based on certain assumptions, which may differ from your personal home loan scenario.

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Discount points apply, view assumptions for details. Rates valid on:
Wed, Jul 12 2017, 09:49 AM PT and are subject to change without notice.

Rates display is temporarily unavailable.

For a rate quote, please call a Pennymac Loan Officer at (866) 549-3583.

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Conventional Purchase

Conventional mortgages are one of the most common types of home loans available, making up more than half of the mortgages in the U.S. These loans aren’t insured or guaranteed by the government and can be adapted to fit many different financial situations.

When determining your mortgage eligibility, lenders follow an established set of guidelines, which include details on your financial situation and history, down payment amount, and loan amount. A mortgage that matches these guidelines is also known as a conventional loan. This type of loan has many different term options, can be used to purchase second homes and investment properties, and also has some of the lowest interest rates available.

Resources & Tools

Get a Customized Rate Quote

Want to know which mortgage will work best for your plans? You can get an instant customized quote with estimated monthly payments per loan type and term, based on the information you enter. You can also get started on your BuyerReady Certification with a Pennymac Loan Expert to get ahead of competing buyers for your perfect home.

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Purchase Loan Calculator

Find out how much house you can afford and estimate your monthly payment before speaking with a licensed loan officer.

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Mortgage Learning Center

We’re always adding new articles and resources to our Learning Center to help provide you with unbiased, useful mortgage information on a wide range of topics.

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Home Value Estimator

Get a report on the estimated value of your home that provides two estimated market values from leading providers.

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What is a conventional mortgage?

A conventional mortgage is a loan made for a buyer who meets certain established lending guidelines. These mortgages are not backed by government entities like the FHA, VA, or USDA loans, but their guidelines come from Fannie Mae and Freddie Mac, the two agencies that regulate home loans in the U.S. Conventional mortgages come in two forms: fixed-rate mortgages and adjustable rate mortgages, or ARMs.

How do I qualify for a conventional mortgage loan?

The flexibility and low rates offered by conventional mortgages make them a great choice for many homebuyers. If you have a minimum credit score of 620, a down payment of at least 3%, and a debt-to-income (DTI) ratio of 45% or less, then you may qualify for a conventional home loan. Contact a Pennymac Loan Officer today to get a conventional loan today.

How does a conventional loan differ from an FHA?

An FHA loan is guaranteed by the Federal Housing Administration. This partnership shares the risk of the loan between the lender and the U.S. government. Because of this, lenders can offer FHA loans to buyers who might not qualify for a conventional loan. In addition to different qualifications, FHA loans also come with required mortgage insurance.

Conventional Purchase Loan Types

When you’re ready to buy, a conventional loan can be a great, low rate option. Pennymac wants to ensure you’re getting the best loan for your financial situation. Let’s take a look at the different types of conventional mortgage financing available to see what’s right for you:

Conventional Purchase Loan Types
Worth Considering If You…
Conventional Purchase Loan Types
30-Year Fixed-Rate Mortgage

As one of the most popular and well-known, the 30-year fixed rate mortgage allows you to pay back your mortgage over 30 years with a fixed interest rate, resulting in low (and unchanging) monthly payments.

Worth Considering If You…
  • Like a low monthly payment
  • Want to keep the same rate
  • Have good credit and qualify for a low rate
  • Plan to be in your home long term
Conventional Purchase Loan Types
15-Year and 20-Year Fixed-Rate Mortgages

These fixed-rate mortgages have shorter terms, and many times offer even lower fixed rates than a 30-year mortgage.

Plus with a 15-year or 20-year home loan, you can avoid extending the term of your loan out.

Worth Considering If You…
  • Want to pay less in total interest
  • Can make a slightly higher monthly payment
  • Wish to build equity faster
  • Need to pay off your home sooner
  • Are refinancing from a 30-year loan
Conventional Purchase Loan Types
Adjustable-Rate Mortgage (ARM)

An adjustable-rate mortgage starts with an initial period (usually 3 - 10 years) of low principal and interest payments with a fixed rate, and then converts to a second period in which the interest rate will become variable and adjust.

ARM rate adjustments are based on larger financial indexes, and can also come with rate caps that limit how much they can increase.

Worth Considering If You…
  • Want a low payment to start
  • Plan to pay off your mortgage quickly or refinance
  • Anticipate positive financial changes
  • Expect to be in your home for the short term

Ready to make your move?

The ideal first step in the journey to your new home would be to get a BuyerReady Certification from Pennymac. This special certification can help you get ahead of competing buyers, as it shows sellers you are in a strong position to secure financing for the home on your wish list. It also helps you know your ideal price range to search within, and what your monthly payment could be. Connect with a Pennymac Loan Expert to explore your options, or get started online.

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Frequently Asked Conventional Mortgage Questions

How does a conventional mortgage work?

To apply for a conventional mortgage, you will need to choose a lender, complete a mortgage application, and then supply the lender with any documents needed to verify your background, credit and other financial history, and current credit score. After the application stage, your loan will go through underwriting, and then closing.

How long does it take to repay a conventional mortgage?

If you make your regular monthly payments, your conventional mortgage will be paid off when the term of your loan is up, whether it is 15, 20, or 30 years. However, paying extra toward your mortgage can allow you to pay it off earlier, and potentially saving thousands in interest long-term.

How much am I able to borrow for a mortgage?

One of the guidelines that conventional loans must adhere to is a loan amount limit. These limits are provided to Fannie Mae and Freddie Mac by the Federal Housing Finance Agency (FHFA). For most of the U.S., the 2023 maximum conforming loan limit will be $726,200, up from $647,200 in 2022. In areas with high housing costs, the limit will be $1,089,300 — areas like San Francisco.

Why is a fixed-rate conventional loan the most popular?

With low rates, flexibility, and no mortgage insurance when you put at least 20% down, the benefits of a conventional mortgage make it a great choice for many homebuyers. Additionally, since the loan’s rate is fixed, you know exactly what your loan payment will be throughout the life of your mortgage. Your loan payment, itself, will not change unless you choose to refinance. However, your escrow (typically included in the monthly payment total) can fluctuate slightly from year to year because of taxes and homeowner’s insurance, factors outside of your lender’s control. A fixed rate loan allows homeowners to budget and plan for the future with little to no increases in their payment amount.

Interest rate vs. APR: What’s the difference?

When you get a mortgage loan, interest is not your only expense. You will also pay several fees, closing costs, and maybe even discount points. All of these costs added together and then divided by the length of your loan are known as your annual percentage rate, or APR — a way to measure the true cost of your loan.

Fixed-rate vs. adjustable-rate conventional loan

With a fixed-rate conventional loan, your interest rate will be fixed for the entire duration of the loan. With an adjustable-rate conventional loan, or ARM, your rate will be fixed initially, and then adjust on a regular schedule. For example, a 5/1 ARM will have the same fixed interest rate for the first five years, and then it will adjust up or down every year after that.