Conventional Mortgage
A conventional mortgage is a mortgage where the down payment is 20% or more of the purchase price, which means mortgage default insurance is not required. Because there is more equity from the start, the lender’s risk is lower.
Without default insurance premiums added to the mortgage, the total cost can be lower. Conventional mortgages may also allow more options for amortization and property types, depending on the lender.
Why this matters:
Putting 20% down can reduce total costs, but it ties up more cash. Understanding what changes at the 20% threshold helps borrowers choose the best balance between liquidity and long-term cost.
Related Mortgage Terms
Often confused with:
High-Ratio Mortgage — High-ratio mortgages have less than 20% down and require default insurance.
Closely related:
Down Payment — The main factor that determines conventional vs high-ratio.
Mortgage — The broader loan structure this classification applies to.
Next step:
High-Ratio Mortgage — Compare rules, costs, and trade-offs.