An FHA loan is a mortgage insured by the Federal Housing Administration, designed for buyers who can only bring a small down payment or who have credit scores below the conventional-loan threshold. The trade-off is a layer of mortgage insurance — an upfront premium plus a recurring annual premium — that stacks on top of your principal-and-interest payment. This calculator shows you exactly what that all-in monthly number looks like, so you can compare an FHA offer against a conventional loan and budget the full monthly cost rather than just the note rate.
Adjust the sliders and every figure updates instantly. You will see the base loan, the financed upfront mortgage insurance premium (UFMIP), the monthly MIP, and the total monthly payment side by side.
How to Use
- Enter the Home Price — the amount you agree to pay the seller. FHA loans are capped by county-specific loan limits; above those limits you would need a jumbo or conventional loan instead.
- Set your Down Payment. FHA's hallmark feature is the 3.5% minimum down payment, available to borrowers with a credit score of 580 or higher. If your score falls between 500 and 579, FHA requires 10% down.
- Type your Interest Rate. FHA rates track conventional rates but are often slightly lower because the government insurance reduces lender risk. Test a range of ±0.25% to stress-test your budget.
- Choose the Loan Term. The vast majority of FHA loans are 30-year fixed, but 15- and 20-year terms are available with a lower rate and faster equity buildup.
- Expand the advanced options to review the Upfront MIP and Annual MIP. The default 1.75% upfront and 0.85% annual rates reflect current HUD policy for a 30-year loan with less than 10% down. You can edit these if your lender quotes different numbers.
The result card breaks the payment into principal-and-interest and the monthly MIP, then shows the total monthly outlay and the cash you will need at closing.
How FHA Mortgage Insurance Works
Unlike private mortgage insurance (PMI) on a conventional loan, FHA mortgage insurance has two parts:
- Upfront MIP (UFMIP) — 1.75% of the base loan amount, charged at closing. It is almost always financed into the loan rather than paid out of pocket, which means you borrow it and pay interest on it over the life of the mortgage. On a $289,500 base loan, that is $5,066.25 added to what you owe.
- Annual MIP — a recurring premium, currently 0.85% per year for most 30-year FHA loans with less than 10% down. It is divided by 12 and collected monthly through your escrow account.
The monthly payment itself uses the standard amortization formula:
M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
Where P is the financed loan (base loan plus UFMIP), r is the monthly interest rate, and n is the number of monthly payments. If the rate is 0%, the formula divides the principal evenly across the number of months.
A key difference from conventional PMI: FHA annual MIP does not automatically drop off when you reach 20% equity. For loans taken out after June 3, 2013, MIP lasts for the life of the loan if your down payment is less than 10%. To remove it, you must refinance into a conventional loan once you reach 20% equity.
Examples
Example 1 — The standard FHA scenario. A first-time buyer offers $300,000 on a home, puts down 3.5% ($10,500), locks a 6.5% rate for 30 years, and uses the standard 1.75% upfront and 0.85% annual MIP. The base loan is $289,500; the financed UFMIP is $5,066.25, bringing the financed loan to $294,566.25. The monthly principal-and-interest payment is about $1,862, the monthly MIP is about $205, and the total monthly payment lands near $2,067. The only cash due at closing is the $10,500 down payment (plus third-party closing costs the calculator does not include).
Example 2 — A larger purchase. On a $600,000 home with 3.5% down at 6.5% for 30 years, the base loan is $579,000, UFMIP adds $10,132.50, and the monthly P&I is roughly $3,720. Monthly MIP adds about $410, for a total near $4,130 per month. Note that FHA county loan limits may cap the loan amount below this figure in lower-cost areas.
Example 3 — The 15-year trade-off. On the same $300,000 home at 3.5% down with a 6.5% 15-year term, the monthly P&I jumps to about $2,566 and MIP stays near $205, for a total around $2,771. The payment is $700 higher, but the loan builds equity twice as fast and the MIP may drop off earlier depending on the down payment percentage.
FHA vs Conventional: When Does FHA Win?
FHA is not always the cheaper option. Compare the two:
- FHA wins when your credit score is below 680, your down payment is under 10%, or your debt-to-income ratio is above 43%. Conventional PMI is priced by credit score, so a lower score can push conventional PMI above FHA's flat 0.85%.
- Conventional wins when you can put 20% down — then you avoid mortgage insurance entirely — or when your credit score is 740 or higher and conventional PMI can drop below 0.5%.
Run both loans through their respective calculators and compare the total monthly payment over the first five to seven years, since most borrowers move or refinance before the loan is paid off.
FAQ
How much down payment is required for an FHA loan?
The minimum down payment is 3.5% of the home purchase price for borrowers with a credit score of 580 or higher. If your credit score is between 500 and 579, FHA requires 10% down. The down payment can come from your savings, a gift from a family member, or an approved down-payment assistance program.
What is the upfront FHA mortgage insurance premium?
The upfront mortgage insurance premium (UFMIP) is 1.75% of the base loan amount. On a $289,500 loan, that is $5,066.25. It is almost always financed into the loan rather than paid at closing, which means it is added to your principal and you pay interest on it over the life of the mortgage.
How much is the annual FHA MIP?
For most 30-year FHA loans with less than 10% down, the annual MIP is 0.85% of the original base loan amount, divided by 12 and paid monthly. On a $289,500 loan, that is about $205 per month. Rates vary by loan size, term, and down payment percentage; loans with more than 10% down may qualify for a lower 0.80% annual MIP.
Does FHA mortgage insurance ever go away?
For FHA loans originated after June 3, 2013, the annual MIP lasts for the life of the loan if your down payment was less than 10%. If you put 10% or more down, MIP drops off after 11 years. To remove MIP early, most borrowers refinance into a conventional loan once they reach 20% home equity.
What credit score do I need for an FHA loan?
The minimum FICO score for the 3.5% down payment is 580. Borrowers with scores between 500 and 579 can still qualify but must put at least 10% down. FHA also allows non-traditional credit histories, which can help first-time buyers with thin credit files.
Are there FHA loan limits?
Yes. FHA sets a maximum loan amount by county, adjusted annually. For 2024, the floor limit in most low-cost counties is $498,257 for a single-family home, while high-cost counties (such as San Francisco or New York) allow up to $1,149,825. Loans above these limits are not FHA-eligible and require jumbo financing.
Can I use an FHA loan to buy a multi-unit property?
Yes. FHA loans allow owner-occupied 2-4 unit properties, with slightly higher loan limits. You can use up to 75% of the projected rental income from the other units to help qualify. This makes FHA a popular tool for small real-estate investors starting out.
Disclaimer
This FHA loan calculator is provided for informational purposes only and does not constitute financial, lending, or tax advice. Estimates are based on standard FHA mortgage insurance assumptions (1.75% upfront MIP and 0.85% annual MIP for a 30-year term with less than 10% down); actual premiums, rates, and loan limits vary by county, credit profile, lender, and program. Property tax, homeowner's insurance, and closing costs are not included in this calculation. Always confirm your final payment, MIP rate, and terms directly with an FHA-approved lender before committing to a loan.