Flexible terms, competitive rates, and as little as 3% down. The most popular mortgage option for Montana homebuyers.
Start Your ApplicationA conventional loan is a mortgage that is not backed by a government agency like the FHA, VA, or USDA. Instead, conventional loans conform to the guidelines set by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that purchase mortgages from lenders. This makes them the most widely available and commonly used mortgage type in the United States.
Conventional loans offer significant flexibility. They can be used to purchase a primary residence, a second home, or an investment property. They are available in fixed-rate and adjustable-rate configurations, with terms ranging from 10 to 30 years. Unlike government-backed loans, conventional mortgages do not charge an upfront funding fee or guarantee fee, which can save borrowers thousands of dollars at closing.
As a Montana mortgage brokerage, Renegade Mortgage works with over 50 wholesale lenders to find the most competitive conventional loan rates available. Whether you are a first-time buyer in Helena or purchasing your next home in Bozeman, we will shop the market to get you the best terms.
Choose from 10, 15, 20, 25, or 30-year fixed-rate terms, or adjustable-rate options with 5, 7, or 10-year initial fixed periods.
Unlike FHA mortgage insurance, conventional PMI can be removed once you reach 80% loan-to-value, lowering your monthly payment over time.
Conforming loan limits are typically higher than FHA limits, giving you more purchasing power in Montana's growing real estate markets.
Conventional loans do not charge an upfront mortgage insurance premium or funding fee, reducing your cash needed at closing.
Unlike government-backed loans, conventional financing is available for vacation properties and rental investment properties.
Borrowers with strong credit and solid down payments often find conventional loans offer the lowest available interest rates.
Your interest rate and monthly principal-and-interest payment stay the same for the entire life of the loan. This is the most popular choice for buyers who want predictable payments and plan to stay in their home for more than five to seven years.
An ARM offers a lower initial interest rate for a set period (typically 5, 7, or 10 years), after which the rate adjusts periodically based on market conditions. Rate caps limit how much your rate can increase at each adjustment and over the life of the loan.
One of the biggest advantages of conventional loans is the range of down payment options available. Your down payment affects your interest rate, PMI costs, and monthly payment.
Available for first-time buyers through Fannie Mae HomeReady and Freddie Mac Home Possible programs. PMI required until 80% LTV.
Standard low-down option for primary residences. Lower PMI costs than 3% down. Available for repeat buyers.
Significantly reduced PMI premiums. Stronger offer in competitive markets. Builds immediate equity.
Eliminates private mortgage insurance entirely. Lowest monthly payment. Best available interest rates.
Private mortgage insurance (PMI) is required on conventional loans when your down payment is less than 20%. PMI protects the lender in case of default, and the cost is added to your monthly mortgage payment. Typical PMI rates range from 0.3% to 1.5% of the original loan amount per year, depending on your credit score and down payment.
The key advantage of conventional PMI over FHA mortgage insurance is that it can be removed. You can request PMI cancellation once your loan balance reaches 80% of the home's original appraised value. Your servicer is required to automatically terminate PMI when your balance reaches 78%. If your home has appreciated significantly, you may also be able to get a new appraisal to demonstrate that you have reached 20% equity sooner.
This is a significant benefit compared to FHA loans, which require mortgage insurance for the life of the loan on most originations. Over time, removing PMI can save you hundreds of dollars per month.
The minimum down payment for a conventional loan is 3% for qualified first-time homebuyers through programs like Fannie Mae HomeReady or Freddie Mac Home Possible. Standard conventional loans require 5% down. A 20% down payment eliminates the need for private mortgage insurance (PMI).
You can request PMI removal once your loan balance reaches 80% of the original appraised value. PMI is automatically removed when your balance reaches 78% of the original value. You may also be able to get a new appraisal to demonstrate 80% LTV if your home has appreciated significantly.
Montana follows the standard conforming loan limit set by the Federal Housing Finance Agency (FHFA). For 2026, the baseline conforming limit for a single-family home is $806,500 in most Montana counties. Loans above this amount are considered jumbo loans and have different qualification requirements.
A fixed-rate mortgage offers payment stability for the life of the loan and is ideal if you plan to stay in your home long-term. An adjustable-rate mortgage (ARM) typically starts with a lower rate that adjusts after an initial fixed period (5, 7, or 10 years). ARMs can make sense if you plan to sell or refinance before the adjustment period begins.
Closing costs for a conventional loan in Montana typically range from 2% to 4% of the loan amount. This includes lender fees, appraisal, title insurance, recording fees, and prepaid items like property taxes and homeowners insurance. Your loan officer will provide a detailed Loan Estimate within three business days of your application.
Talk to a Montana mortgage expert about your conventional loan options. We shop over 50 lenders to find you the best rate.