FHA Loan Calculator
Calculate your FHA loan monthly payment including the upfront mortgage insurance premium (1.75% financed into the loan) and annual MIP. Enter as little as 3.5% down payment and see the full breakdown of principal, interest, MIP, property tax, and insurance. Understand when MIP can be removed and how different down payment levels affect your total cost.
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How It Works
FHA requires a minimum 3.5% down payment with a credit score of 580 or higher. The down payment amount determines the base loan and the LTV ratio, which affects MIP rates and duration.
Down = Home Price x Down%$300K home x 3.5% = $10,500 downThe upfront MIP of 1.75% is calculated on the base loan amount (home price minus down payment). It is added to the loan balance and financed over the full term, increasing total interest paid.
Upfront MIP = Base Loan x 1.75%$289,500 base loan x 1.75% = $5,066 upfront MIPAnnual MIP is a percentage of the original loan amount, divided by 12 for the monthly cost. The rate depends on LTV and term length. This is added on top of the principal and interest payment.
Monthly MIP = Loan x Annual MIP Rate / 12$289,500 x 0.55% / 12 = $133/mo MIPThe base monthly payment calculated on the total loan amount (base loan plus upfront MIP) using the standard amortization formula. This does not include MIP, taxes, or insurance.
P&I = Total Loan x r(1+r)^n / [(1+r)^n - 1]$294,566 at 6.5% for 30yr = $1,862/mo P&IThe complete monthly housing cost combining principal and interest, annual MIP, property tax, and homeowner insurance. This is the number lenders use for debt-to-income qualification.
Total = P&I + Monthly MIP + Tax/12 + Insurance/12$1,862 + $133 + $300 + $125 = $2,420/moFor loans with initial LTV above 90% (down payment under 10%), MIP lasts the entire life of the loan. For LTV at 90% or below, MIP drops after 11 years. Refinancing to conventional is the main exit strategy.
LTV > 90% = lifetime MIP; LTV ≤ 90% = 11 years3.5% down = 96.5% LTV = lifetime MIPQuick Reference
Common examples — verify instantly above.
$300K, 3.5% down
Down payment amount
$10,500
Upfront MIP
$289,500 base loan
$5,066 (1.75%)
Annual MIP
96.5% LTV, 30yr
0.55%/year
Monthly MIP
$289,500 loan
$133/mo
P&I only
$294,566 at 6.5%, 30yr
$1,862/mo
Total payment
P&I + MIP + tax + ins
~$2,420/mo
10% down
$300K home
$30,000 down, MIP for 11yr
3.5% vs 10%
MIP difference
Lifetime vs 11 years
Tips & Shortcuts
Put at least 10% down if possible to limit MIP to 11 years instead of the full loan term. The long-term savings are substantial.
Consider refinancing to a conventional loan once you reach 80% LTV to eliminate MIP entirely. This is often the best exit strategy for FHA borrowers.
FHA allows gift funds for the entire down payment. Family members, employers, and approved non-profits can contribute to your 3.5% down payment.
Compare FHA with conventional PMI carefully. Conventional PMI rates vary by credit score and LTV, and PMI automatically drops at 78% LTV. FHA MIP often costs more over the life of the loan.
FHA loans are assumable — a future buyer with qualifying credit can take over your FHA loan at its original rate. This can be a selling advantage if rates rise.
Remember that the upfront MIP is financed into the loan, so you pay interest on it for the full term. On a 30-year loan, $5,000 in upfront MIP costs about $6,400 in additional interest.
Common Mistakes to Avoid
Thinking FHA MIP works like conventional PMI and drops automatically at 80% LTV
Unlike conventional PMI, FHA MIP with less than 10% down lasts the entire life of the loan. The only way to remove it is to refinance into a conventional mortgage.
Ignoring the upfront MIP when calculating total loan cost
The 1.75% upfront MIP adds thousands to your loan balance. On a $290,000 loan, that is $5,075 extra principal that accrues interest for 30 years.
Not considering the total cost of FHA versus conventional
FHA is great for getting into a home with low down payment and credit score, but the lifetime MIP cost can exceed $50,000. Compare total cost over your expected ownership period.
Assuming FHA has lower interest rates than conventional
FHA rates are sometimes lower but not always. The real advantage is easier qualification — lower credit score and down payment requirements, not necessarily better rates.
Forgetting that property tax and insurance must be escrowed
FHA loans require escrow accounts for property tax and insurance. These are collected monthly and add significantly to the total payment beyond principal, interest, and MIP.
Not checking FHA loan limits for your county
FHA has maximum loan amounts that vary by location. In some high-cost areas the limit is over $1 million, but in most areas it is around $500,000. Exceeding the limit means you cannot use FHA financing.
Frequently Asked Questions
The upfront MIP is 1.75% of the base loan amount, financed into the loan. On a $290,000 base loan (3.5% down on $300,000), the upfront MIP is $5,075, making the total loan $295,075. This is a one-time fee paid at closing and rolled into the loan balance.
Annual MIP depends on loan-to-value ratio and term. For 30-year loans with LTV above 95%, the annual rate is 0.55%. For LTV between 90% and 95%, it is 0.50%. For LTV at 90% or below, it is 0.45%. This annual amount is divided by 12 and added to each monthly payment.
For FHA loans with LTV above 90% at origination (less than 10% down), MIP lasts the entire life of the loan. For loans with LTV at 90% or below (10% or more down), MIP can be removed after 11 years. The only way to remove lifetime MIP is to refinance into a conventional loan.
FHA loans require a minimum credit score of 580 for 3.5% down payment. With a score between 500 and 579, you must put at least 10% down. Below 500, you do not qualify for FHA financing.
FHA loan limits vary by county and are updated annually. In 2024, the standard limit for single-family homes is $498,257 in most areas and up to $1,149,825 in high-cost areas. Check the FHA website for your specific county limit.
FHA loans are better for buyers with lower credit scores (580 to 660) and smaller down payments. However, FHA MIP never drops off for most borrowers, while conventional PMI drops at 80% LTV. If your credit score is 700 or higher, compare both options carefully.
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