What is the most common type of mortgage?

The most common type of mortgage is the conventional mortgage because it is widely used by borrowers for various types of property purchases. Conventional mortgages are not backed by any government agency, which allows lenders to set their own terms and conditions, making them flexible and widely available. They typically require a higher credit score compared to government-backed loans like FHA and VA loans, but they often offer more competitive interest rates for borrowers who qualify.

Conventional mortgages can be conforming, meaning they meet the requirements set by Fannie Mae or Freddie Mac, or non-conforming, which do not meet those standards but are used for unique situations or larger loan amounts. This versatility contributes to their prominence in the mortgage market.

While FHA loans and VA loans are popular, especially among first-time homebuyers and veterans respectively, they comprise a smaller percentage of the total mortgage market compared to conventional loans. Interest-only mortgages, though they may offer lower initial payments, are less common due to their increased risk and complexity, making them more suitable for specific financial situations rather than the average borrower.