FHA Loan Calculator

How It Works

An FHA loan is a mortgage insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development. The insurance is what lets lenders accept a 3.5% down payment and a lower credit score — and it is also what makes the payment harder to work out, because the insurance comes in two parts. The upfront mortgage insurance premium (UFMIP) is 1.75% of the base loan amount, charged once at closing and usually financed into the loan, which makes the loan itself bigger. The annual MIP is charged every year on the outstanding balance and paid monthly: for most 30-year loans it is 0.55% a year with less than 5% down and 0.50% a year with 5% or more down, under HUD Mortgagee Letter 2023-05.

This calculator builds the payment in the right order. It starts with the base loan (price minus down payment), adds the 1.75% upfront premium to get the total loan when you finance it, works out principal and interest on that total loan, then adds monthly MIP from the annual rate that applies to your term, loan amount and loan-to-value ratio, plus tax and insurance. It also tells you how long the annual MIP lasts: with less than 10% down it stays for the life of the loan, and with 10% or more down it ends after 11 years.

Worked Example

Take a $350,000 home with the minimum 3.5% down payment ($12,250.00) and a 30-year loan at 7.11%. The base loan is $337,750.00. The upfront MIP is 1.75% of that, $5,910.63, and financing it into the loan gives a total loan of $343,660.63. Principal and interest on that loan are $2,311.83 a month. The annual MIP rate is 0.55% (less than 5% down, 30-year term), which is $157.51 a month. Add property tax of $4,200 a year ($350 a month) and insurance of $1,800 a year ($150 a month) and the full monthly payment is $2,969.34.

The MIP is the part buyers underestimate. At $157.51 a month for the life of a 30-year loan, the annual premium alone adds up to roughly $56,704.00 — on top of the $5,910.63 upfront premium. That is the real price of the low down payment, and it is why many FHA borrowers refinance into a conventional loan once they have 20% equity: conventional PMI can be dropped, but FHA MIP at less than 10% down cannot.

Assumptions

• The upfront MIP is 1.75% of the base loan amount, per HUD rules, and is financed into the loan unless you choose to pay it in cash.
• Annual MIP follows HUD Mortgagee Letter 2023-05: for 30-year loans at or below $726,200, 0.55% with less than 5% down and 0.50% with 5% or more down; for 15-year loans, 0.15% at 90% LTV or below and 0.40% above 90%. Larger base loans carry higher rates (0.65%–0.75%).
• Monthly MIP is estimated from the starting loan balance. FHA actually bills on the average outstanding balance, so the true figure falls slightly over time — the estimate is a little high in later years.
• The interest rate stays fixed for the full term. Property tax and insurance stay constant.
• MIP duration follows the rule for loans endorsed since June 2013: 11 years with 10% or more down, life of the loan with less than 10% down.

What this calculator leaves out: closing costs, the FHA loan limit check for your county (the 2026 floor is $541,287 for most counties, up to $1,249,125 in high-cost areas), seller concessions, and any down payment assistance. It also assumes a purchase loan; FHA refinance rules differ.

Putting more down changes every number at once. The table below shows the same $350,000 home at 7.11% over 30 years at four down payment levels:

The 10% row is the interesting one: the monthly payment is $179.68 lower than at 3.5% down, and the MIP ends after 11 years instead of lasting 30, so total MIP paid is about $17,628.19 rather than roughly $56,704.00. If you can stretch to 10% down, the long-run saving is far larger than the monthly difference suggests.

How to Use This Calculator

Enter the home price and your down payment — the dollar and percentage fields stay in sync. The calculator enforces the 3.5% FHA minimum; if your credit score is between 500 and 579, the minimum is 10% instead. Choose the loan term and whether to finance the upfront MIP (most borrowers do), then add property tax and insurance. The results show the base loan, the upfront premium, the total loan, the annual MIP rate that applies to you and how long it lasts, and the full monthly payment.

Compare the 15-year option before settling on 30 years. The annual MIP on a 15-year loan is much lower — 0.15% at 90% LTV or below, 0.40% above it — and the loan is paid off in half the time, though the monthly payment is higher. And if your base loan is above $541,287, check your county's FHA limit: the calculator flags it, because the 2026 floor applies in most counties but high-cost areas go higher.

Tips and Practical Advice

Price the MIP before you fall in love with the low down payment. On the worked example, MIP costs about $56,704.00 over 30 years plus $5,910.63 up front. A conventional loan with 5% down and PMI can be cheaper overall for borrowers with good credit, because PMI can be cancelled at 20% equity while FHA MIP at 3.5% down cannot. Run both and compare the total cost, not just the down payment.

If you do take an FHA loan, plan your exit from MIP. Once your home's value has risen or your balance has fallen enough to give you 20% equity, refinancing into a conventional loan removes the insurance entirely. Watch your equity, and check refinance rates once you are close — every year of MIP you avoid is worth over $1,800 at the worked-example figures.

Finally, keep your credit score in mind. The 3.5% minimum down payment requires a score of 580 or higher; between 500 and 579 you need 10% down, and below 500 you are not eligible for FHA financing. Lenders can also set higher minimums than HUD's floor, so check with your lender rather than assuming the minimum applies to you.

Sources: HUD Mortgagee Letter 2023-05 (annual MIP schedule; upfront MIP 1.75%); HUD Handbook 4000.1 (3.5% minimum down at 580+ credit; 10% at 500–579); HUD Mortgagee Letter 2013-04 (MIP duration: 11 years at 10%+ down, life of loan below 10%); HUD Mortgagee Letter 2025-23 (2026 limits: $541,287 floor, $1,249,125 ceiling). Last reviewed: 13 November 2026.

Frequently Asked Questions