FHA Loan Calculator

Calculate FHA loan payments with mortgage insurance included. See how FHA loans with low down payments affect your monthly costs.

What Is an FHA Loan Calculator?

An FHA loan calculator estimates the monthly payment and total cost of a mortgage insured by the Federal Housing Administration. Unlike conventional mortgage calculators, it specifically accounts for FHA's unique mortgage insurance premiums: the upfront MIP (typically 1.75% of the loan amount) that gets added to the loan balance, and the annual MIP that adds to the monthly payment for the life of the loan.

FHA loans are popular with first-time homebuyers because they offer lower down payment requirements and more flexible credit standards. However, the mandatory mortgage insurance makes FHA loans more expensive than conventional loans for borrowers who qualify for both. This calculator helps you understand the true cost difference.

How FHA Loan Math Works

The FHA calculation adds complexity to the standard mortgage formula. First, the upfront MIP (1.75% of the base loan amount) is added to the loan balance. The amortization formula then calculates principal and interest on this larger amount:

Total Loan = (Home Price - Down Payment) + Upfront MIP

Monthly P&I = Total Loan x [r(1+r)^n] / [(1+r)^n - 1]

The annual MIP is calculated separately on the base loan amount (before upfront MIP) and divided by 12 for the monthly charge. Property tax, insurance, and HOA fees are added on top.

How to Use This Calculator

Enter the home price and your down payment percentage (minimum 3.5% for FHA).
Set the interest rate and loan term (15 or 30 years).
Enter MIP rates. The standard upfront MIP is 1.75% and annual MIP is 0.85% for most borrowers.
Add property tax, insurance, and HOA for a complete monthly payment picture.
Review the breakdown showing each component of your monthly payment and lifetime costs.

Worked Examples

Example 1: Minimum Down Payment FHA

Home price $300,000, 3.5% down ($10,500), 6.5% rate, 30 years. Base loan $289,500, upfront MIP $5,066, total loan $294,566. Monthly P&I is about $1,862, monthly MIP $205, plus tax and insurance. Total monthly approximately $2,367.

Example 2: FHA with 10% Down

Home price $400,000, 10% down ($40,000), 6.25% rate, 30 years. Base loan $360,000, upfront MIP $6,300. Total monthly approximately $2,814. With 10% down, MIP cancels after 11 years, saving over $30,000 in MIP compared to 3.5% down.

Example 3: 15-Year FHA Loan

Home price $275,000, 3.5% down, 5.75% rate, 15 years. Higher monthly payment of approximately $2,654 but total interest is significantly less. Total MIP is also lower due to the shorter term.

Common Use Cases

First-time buyer planning: Estimate payments with the minimum 3.5% down payment to see if FHA homeownership fits your budget.
FHA vs conventional comparison: Calculate FHA costs to compare against conventional loan quotes.
Down payment impact analysis: See how 3.5% versus 10% down affects MIP duration and total cost.
Affordability check: Determine the maximum home price where the total monthly payment stays within your budget.

Tips and Common Mistakes

Factor in MIP for the full loan life. Unlike conventional PMI that cancels at 20% equity, most FHA MIP lasts the entire 30 years. Budget for this ongoing cost or plan to refinance into a conventional loan once you build sufficient equity.

Consider refinancing to conventional. Once you have 20% equity, refinancing from FHA to conventional eliminates MIP. Calculate the refinance costs against MIP savings to find the optimal timing.

Do not forget the upfront MIP increases your loan balance. The 1.75% upfront MIP is typically financed into the loan, meaning you pay interest on it for 30 years. On a $300,000 loan, that is $5,250 added to the balance.

Compare FHA to conventional carefully. If your credit score is 700 or higher and you can put 5% or more down, a conventional loan may cost less despite the higher down payment due to lower or cancellable mortgage insurance.

Frequently Asked Questions

What is an FHA loan?

An FHA loan is a mortgage insured by the Federal Housing Administration, designed to help first-time and low-to-moderate income homebuyers. FHA loans require a lower minimum down payment (3.5%) and accept lower credit scores than conventional loans. The trade-off is mandatory mortgage insurance premiums (MIP) that increase the monthly payment and total loan cost.

What is the minimum down payment for an FHA loan?

The minimum FHA down payment is 3.5% of the purchase price for borrowers with a credit score of 580 or higher. Borrowers with scores between 500 and 579 must put down at least 10%. For a $350,000 home, the 3.5% minimum is $12,250. Down payment funds can come from savings, gifts from family, or approved down payment assistance programs.

What is MIP and how does it work?

Mortgage Insurance Premium (MIP) is FHA's version of mortgage insurance, paid in two forms. The upfront MIP is 1.75% of the loan amount, typically rolled into the loan balance. The annual MIP ranges from 0.45% to 1.05% depending on loan amount, term, and loan-to-value ratio. For most borrowers, the annual MIP is 0.85% of the loan amount, divided by 12 and added to the monthly payment.

Can I remove FHA mortgage insurance?

For FHA loans originated after June 3, 2013, with a down payment of less than 10%, MIP lasts the entire life of the loan. If you put down 10% or more, MIP drops off after 11 years. The only way to eliminate MIP on most FHA loans is to refinance into a conventional loan once you have 20% equity. This is a significant difference from conventional PMI, which cancels at 80% LTV.

What credit score do I need for an FHA loan?

FHA requires a minimum credit score of 500 with a 10% down payment, or 580 with the 3.5% minimum down payment. However, many FHA lenders set their own minimum at 620 or higher. Higher credit scores qualify you for better interest rates. FHA is more lenient than conventional loans for borrowers with past credit issues like bankruptcy or foreclosure.

How does an FHA loan compare to a conventional loan?

FHA loans offer lower down payments and more lenient credit requirements but charge mandatory MIP for the loan's life. Conventional loans require higher credit scores and typically 5-20% down but allow PMI cancellation at 20% equity. For buyers with strong credit and 10%+ down, conventional loans often cost less long-term. FHA is better for buyers with limited savings or credit challenges.

What are FHA loan limits?

FHA loan limits vary by county and are updated annually. In 2024, the floor limit for most areas is $472,030 for single-family homes, while high-cost areas can reach $1,089,300. These limits cap the maximum FHA loan amount in each area. If you need to borrow more than the local FHA limit, you will need a conventional or jumbo loan instead.

Can I use an FHA loan for investment property?

No, FHA loans are strictly for primary residences where you live as your main home. You must move into the property within 60 days of closing and live there for at least one year. After one year, you can move out and keep the FHA loan. FHA does allow loans on multi-unit properties (up to 4 units) as long as you live in one of the units.