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title: “When to Refinance FHA to Conventional: Break-Even Analysis” ogImage: “/og/satori/fha-to-conventional-refinance-break-even.png” description: “Detailed break-even analysis for refinancing from an FHA loan to a conventional mortgage, including when it makes financial sense and how to calculate your savings.” pubDate: 2026-03-20 faqSchema:

• question: “When should I refinance my FHA loan to conventional?” answer: “Refinance from FHA to conventional when you have at least 20% equity in your home, a credit score of 680 or higher, and the savings from eliminating MIP exceed your refinancing costs within 2-3 years.”
• question: “How much does it cost to refinance FHA to conventional?” answer: “Closing costs for refinancing FHA to conventional typically range from 2% to 5% of the loan amount. For a $300,000 loan, that is $6,000 to $15,000. These costs can sometimes be rolled into the new loan.”
• question: “Can I refinance FHA to conventional without 20% equity?” answer: “Yes, you can refinance to conventional with less than 20% equity, but you will still need PMI. However, conventional PMI is often cheaper than FHA MIP and cancels at 78% LTV, so it may still save you money.”
• question: “How do I calculate the break-even point for refinancing?” answer: “Divide your total closing costs by your monthly savings. For example, if closing costs are $5,000 and you save $200/month, your break-even point is 25 months. Refinancing makes sense if you plan to stay beyond that point.”
• question: “Will my credit score affect my conventional refinance rate?” answer: “Yes, conventional loan rates are heavily credit-score dependent. A score of 740+ gets the best rates, while scores below 700 may face higher rates and PMI premiums. Check your score before deciding to refinance.”---

Quick Answer

Refinancing from FHA to conventional typically makes sense once you have 20% equity and a credit score of 680+. The savings from eliminating FHA MIP (which lasts for the life of the loan) usually offset refinancing costs within 2-3 years, resulting in tens of thousands of dollars in savings over the remaining loan term.

Key Takeaways

• Refinance FHA to conventional once you reach 20% equity
• Break-even is typically 18-36 months after refinancing
• Even with less than 20% equity, conventional PMI may be cheaper than FHA MIP
• Credit score of 680+ needed for competitive conventional rates
• Total savings over remaining loan term can exceed $40,000

Break-Even Calculation Example

Current FHA Loan:

• Balance: $280,000
• Rate: 6.25%
• Monthly MIP: $128/month (0.55% annual)
• Total Monthly Payment: $1,854

New Conventional Loan:

• Balance: $280,000
• Rate: 6.25% (same rate)
• Monthly PMI: $0 (20% equity)
• Total Monthly Payment: $1,723

Monthly Savings: $131 Closing Costs: $5,600 (2% of loan) Break-Even: 43 months (3.5 years)

10-Year Savings: $10,120 net of closing costs 20-Year Savings: $25,640 net of closing costs

Use our FHA vs Conventional Calculator to run your specific numbers.

When Refinancing Makes Sense

You should strongly consider refinancing when:

• Your home has appreciated enough for 80% LTV or better
• Your credit score has improved to 680+
• Current conventional rates are equal to or lower than your FHA rate
• You plan to stay in the home for at least 3+ more years

When to Wait

Consider delaying if:

• Your credit score is below 680 (conventional rates may be too high)
• You plan to move within 2 years
• Closing costs would take too long to recoup
• Your FHA rate is already very low and conventional rates are higher

Step-by-Step Refinance Process

1. Check your equity — get an estimate of your home’s current value
2. Check your credit score — aim for 680+ for best conventional terms
3. Calculate break-even — compare closing costs vs monthly savings
4. Shop lenders — get quotes from at least 3 conventional lenders
5. Apply and close — typical timeline is 30-45 days

For the full refinancing picture, compare with the FHA Streamline option and review our total cost comparison.