A conventional mortgage is any type of mortgage loan that is not secured by a government entity such as FHA, VA, or USDA but instead is available through 2 primary government sponsored enterprises called Fannie Mae and Freddie Mac.
Conventional loans allow for down payments as low as 3% and come in fixed rate options as well as adjustable rate options. Conventional loans can be used to purchase or refinance a primary residence, a second home, or an investment property. Conventional loans account for approximately 60% of all mortgages in the market.
Conventional loans with a down payment of less than 20% do require a monthly mortgage insurance which is allowed to be canceled once the loan to value of the property falls below 80%.