Not everyone can afford to make the standard 20 percent down payment when buying a home. It can be even more difficult to do as housing prices rebound.

But you can buy a house and put down less than 20 percent. When you do that, your lender also requires that you pay for mortgage insurance—a cost that the lender adds to your monthly bill.

Over the past few years, a low-down-payment loan insured by the Federal Housing Administration has been the best deal. But since April, private mortgage insurers such as Genworth, Radian or Essent, have started dropping their rates to get a bigger chunk of the market. Buoyed by the strong housing market, their rates are down by as much 30 percent. These reduced rates aren't for everyone, though—just for those with an excellent FICO score.

“It used to be that a mortgage insured by the Federal Housing Administration was the best deal, says Jack Pritchard, chief operating officer of The Mortgage Professor, a website that gives guidance on how to get the best loan. But that’s no longer always the case.”

Let’s say you’re interested in buying a home that costs $250,000. Your FICO score is above 760 and through a loan insured by the Federal Housing Administration, you only plan to put down 3.5 percent—the minimum down payment allowed by the Federal Housing Administration.

Earlier this year, such a loan, along with the insurance, could have saved you nearly $100 a month more than if you had taken out a conventional mortgage with private mortgage insurance, according to a study by the Urban Institute, an economic and social policy think tank.

But since private mortgage insurance rates have been falling recently, the situation has flipped. According to an analysis by WalletHub, a consumer finance site, the lower private mortgage insurance rates means you could now get a loan that's $50 less per month than one insured by the Federal Housing Administration.

There’s another benefit to choosing a mortgage backed by private insurers. All Federal Housing Administration-insured mortgages charge an upfront insurance charge of 1.75 percent of the loan amount. That is not the case if you get a conventional mortgage through a different lender.

If Your FICO Score Is Lower

If your FICO score isn't quite as good—between 720 and 759—the benefit is a little more complicated to understand. Under these circumstances, the Federal Housing Administration-insured mortgage would be less expensive than a conventional mortgage by about $20 per month.

But there's a drawback: The only way to stop paying for that insurance is to refinance the mortgage. If you opt, instead, for a low-down-payment conventional mortgage with private insurance, you can ask to have the insurance charge waived after your mortgage balance falls to 80 percent of the home’s value. That could provide a bigger savings over time.

A Down Payment of Just 3 Percent

Recently, Wells Fargo, Bank of America, and JP Morgan Chase have started rolling out low-down-payment programs for low and moderate-income borrowers. With such a loan you can make down payments of as little as 3 percent. There’s a similar loan backed by Fannie Mae and offered by all lenders known as the “Conventional 97” loan. Anyone can apply for this loan and there is no income limit. But the maximum you can borrow with just 3 percent down comes to $417,000.

If all this has you concerned that banks are returning to the heady days of too easily approving mortgages, don’t worry. Today, the requirements to qualify for a mortgage are much more stringent. Buyers who were approved for a conventional loan in April, for instance, had a mortgage cost that came to 23 percent of their monthly income, according to mortgage data company Ellie Mae. The combined cost of the mortgage payment and all other debt was no more than 34 percent.

Something else to consider: While a 3 percent down payment may seem attractive, the bigger your down payment up to 20 percent, the less you'll pay in private mortgage insurance fees.

That said, Dan Green, publisher of TheMortgageReports.com cautions against making the down payment the focal point of your mortgage decision. “A buyer's planned down payment should be a function of a well-planned household budget," he says. "That includes maintaining ample liquid reserves and keeping your mortgage payment modest compared to your monthly income.”