Definition
A mortgage not insured by a government program (such as FHA, VA, or USDA loans). Most are also conforming loans. With less than 20% down, conventional loans typically require private mortgage insurance until you build enough equity.
Why it matters
The conventional-versus-government choice shapes your down payment, mortgage insurance, and total cost. Conventional PMI can be removed as equity grows; some government-program insurance cannot, which changes the long-run math.
Example
A buyer puts 10% down on a $300,000 home with a conventional loan and pays roughly $110 a month of PMI until reaching 20% equity, when it can be removed. A comparable government-insured loan might carry its insurance for the life of the loan.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.