Key Takeaways
- For a 740 credit score on a home purchase, Fannie Mae’s price adjustment (LLPA) is 0.500% of the loan at 3% down, 0.625% at 5% down, 0.750% at 10% down and 0.875% at 20% down.
- Using a rule of thumb of 0.25% of rate per point, that adds an estimated 0.13 to 0.22 percentage point to the rate, so 20% down carries the largest LLPA in this example.
- The Mortgage Reports data: 35.1% of home buyers who requested quotes through our site in 2026 described their credit as fair or poor.
As of November 2026, a buyer with a 740 credit score on a conventional loan pays Fannie Mae loan-level price adjustments of 0.500% of the loan amount at 3% down, 0.625% at 5% down, 0.750% at 10% down and 0.875% at 20% down, according to the Fannie Mae Loan-Level Price Adjustment Matrix. Added to the Nov. 10, 2026 average 30-year conventional rate of 7.201% (7.270% APR), those work out to estimated rates of about 7.33%, 7.36%, 7.39% and 7.42%. The smaller down payments have lower adjustments because they require mortgage insurance, which you pay separately. These are estimates; your actual rate depends on your credit, down payment, property and lender.
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- Estimated mortgage rates by down payment (740 credit score)
- How your down payment changes your price
- The Mortgage Reports data: How home buyers rate their credit in 2026
- PMI applies below 20% down
- Monthly payment by down payment
- How we got these numbers
- FAQ
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Estimated mortgage rates by down payment (740 credit score)
The table below uses a $400,000 purchase price and a 740 credit score. Rates are estimates built from the Nov. 10, 2026 Mortech average plus Fannie Mae’s LLPA for each loan-to-value (LTV) band. For other scores, see mortgage rates by credit score.
| Down payment | LTV (LLPA band) | LLPA (points) | LLPA in dollars | Estimated rate effect | Estimated rate, as of Nov. 10, 2026 | PMI required? |
| 3% ($12,000) | 97% (above 95%) | 0.500% | $1,940 | +0.13% | About 7.33% | Yes |
| 5% ($20,000) | 95% (90.01% to 95%) | 0.625% | $2,375 | +0.16% | About 7.36% | Yes |
| 10% ($40,000) | 90% (85.01% to 90%) | 0.750% | $2,700 | +0.19% | About 7.39% | Yes |
| 20% ($80,000) | 80% (75.01% to 80%) | 0.875% | $2,800 | +0.22% | About 7.42% | No |
Today’s (November 11, 2026) average 30-year conventional rate is 7.227% (7.305% APR). The table above stays fixed on the Nov. 10, 2026 figure of 7.201% (7.270% APR) so the math can be checked.
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How your down payment changes your price
Fannie Mae charges lenders a one-time fee called a loan-level price adjustment, or LLPA, on most conventional loans it buys. The fee is a percentage of the loan amount, also called points. The Consumer Financial Protection Bureau explains that one point equals 1% of the loan amount. Lenders either collect the LLPA as a cost at closing or turn it into a higher interest rate.
For a 740 score, the adjustment peaks right at 20% down (0.875%) and at 15% down (80.01% to 85% LTV, 1.000%), then falls as the down payment shrinks. Fannie Mae can charge less on high-LTV loans because private mortgage insurance takes on part of the loss risk. That doesn’t make a smaller down payment cheaper overall: you borrow more, and you pay PMI every month.
A few rules from Fannie Mae’s guidelines matter here:
- Fannie Mae’s Eligibility Matrix (April 1, 2026) allows up to 97% LTV on a one-unit primary home with a fixed-rate loan. Above 95% LTV, at least one borrower must be a first-time home buyer unless the loan is HomeReady or uses a Community Seconds loan.
- The LLPA matrix waives all LLPAs for HomeReady loans and for first-time home buyers with qualifying income at or below 100% of area median income (120% in high-cost areas).
- LLPAs stack. A condo, a second home or a two- to four-unit property adds its own adjustment on top of the credit score grid.
You can read more in our guide to loan-level price adjustments, and see typical amounts buyers put down in our average down payment on a house report.
The Mortgage Reports data: How home buyers rate their credit in 2026
About 1 in 3 home buyers who requested mortgage quotes through The Mortgage Reports in 2026 described their credit as fair or poor (35.1%), the tiers where Fannie Mae’s price adjustments are largest. Buyers using VA loans reported fair or poor credit more often (42.5%).
| Self-reported credit | The Mortgage Reports data: purchase requests (54,285) | The Mortgage Reports data: vA purchase requests (20,317) |
| Excellent | 15.6% | 12.4% |
| Very good or good | 49.3% | 45.1% |
| Fair | 34.2% | 39.3% |
| Poor | 0.9% | 3.2% |
Source: The Mortgage Reports analysis of home purchase quote requests submitted through our online mortgage form from Jan. 1 to Nov. 9, 2026. Credit tiers are self-reported on our form (Excellent, Very good, Good, Fair or Poor; Very good and Good are counted together). These figures describe people who used our form, not all borrowers.
PMI applies below 20% down
With less than 20% down on a conventional loan, lenders require private mortgage insurance. Freddie Mac estimates PMI costs about $30 to $70 per month for every $100,000 borrowed. Your actual premium depends on your credit score, LTV and the insurer, and Freddie Mac’s range is not broken out by down payment.
PMI doesn’t last forever. Freddie Mac notes you can ask to cancel it once you reach 20% equity, and it ends automatically when your balance is scheduled to reach 78% of the home’s original value, as long as you’re current on payments. See how to avoid PMI without 20% down for other options.
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Monthly payment by down payment
Here is how the pieces add up on a $400,000 home with a 740 score. Payments are principal and interest only, at the estimated rates above, plus Freddie Mac’s general PMI range. Taxes, homeowners insurance and HOA dues are extra.
| Down payment | Loan amount | Estimated principal and interest | Estimated PMI per month | Estimated total |
| 3% | $388,000 | $2,667 | $116 to $272 | $2,783 to $2,939 |
| 5% | $380,000 | $2,620 | $114 to $266 | $2,734 to $2,886 |
| 10% | $360,000 | $2,490 | $108 to $252 | $2,598 to $2,742 |
| 20% | $320,000 | $2,220 | $0 | $2,220 |
The gap between 3% and 20% down is mostly the bigger loan and PMI, not the rate. The LLPA moves the estimated rate by less than a tenth of a point across these four options. Which down payment fits you depends on your savings, how long you plan to stay and what else you need cash for.
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How we got these numbers
We started with the Mortech national average 30-year conventional purchase rate of 7.201% (7.270% APR) for Nov. 10, 2026. We took the LLPA for a 740 to 759 Classic FICO score at each LTV from the purchase grid in the Fannie Mae Loan-Level Price Adjustment Matrix (dated 09.30.2026; the grid applies to loans with terms over 15 years). To show the LLPA as a rate, we used a rule of thumb of about 0.25 percentage point of rate per 1 point of LLPA on a 30-year loan, so 0.875 points becomes about 0.22%. That conversion is our estimate; lenders price points differently. The Mortech figure is an average, not a quote for a specific borrower, so the differences between rows are more useful than any single rate. PMI figures are Freddie Mac’s published general range. All results are estimates. Estimated rates are interest rates, not APRs: they don’t include lender fees, points or mortgage insurance, and they aren’t offers.
FAQ
Sources: Fannie Mae Loan-Level Price Adjustment Matrix; Fannie Mae Eligibility Matrix; Freddie Mac, Breaking down PMI; Consumer Financial Protection Bureau, lender credits and points; Mortech national average rates, Nov. 10, 2026.
