Hip fractures associated with a high economic burden, loss of independence, and a high rate of post-fracture mortality, are a major health concern for modern societies. Areal bone mineral density is the current clinical metric of choice when assessing an individual's future risk of fracture. However, this metric has been shown to lack sensitivity and specificity in the targeted selection of individuals for preventive interventions. Although femoral strength derived from computed tomography based finite element models has been proposed as an alternative based on its superior femoral strength prediction ex vivo, such predictions have only shown marginal or no improvement for assessing hip fracture risk. This study compares finite element derived femoral strength to aBMD as a metric for hip fracture risk assessment in subjects (N = 601) from the AGES Reykjavik Study cohort and analyses the dependence of femoral strength predictions and classification accuracy on the material model and femoral loading alignment. We found hip fracture classification based on finite element derived femoral strength to be significantly improved compared to aBMD. Finite element models with non-linear material models performed better at classifying hip fractures compared to finite element models with linear material models and loading alignments with low internal rotation and adduction, which do not correspond to weak femur alignments, were found to be most suitable for hip fracture classification.