FHA Mortgage Calculator
Estimate your payment on an FHA loan, including mortgage insurance premiums.
Your Details
How It Works
- Enter the home price and down payment (FHA minimum is 3.5%).
- Enter the interest rate and term.
- Press Calculate to see your payment including MIP.
Formula Used
Uses typical FHA MIP rates: ~1.75% upfront, ~0.55% annual — actual rates depend on loan specifics.
Good to Know
- • FHA loans allow down payments as low as 3.5% with qualifying credit.
- • Unlike conventional PMI, FHA MIP often lasts for the life of the loan.
Important Notes
- • MIP rates shown are typical estimates — actual rates vary by loan-to-value and term.
- • FHA loans have specific property and borrower eligibility requirements.
Why FHA Loans Appeal to First-Time Buyers
FHA loans are backed by the Federal Housing Administration, which allows lenders to offer more flexible qualification — lower minimum down payments and more lenient credit requirements than many conventional loans. That flexibility comes at the cost of mortgage insurance premiums (MIP), both an upfront charge and an ongoing monthly cost, which fund the program's insurance backing.
FHA MIP vs. Conventional PMI
A key difference from conventional loans: FHA mortgage insurance often lasts for the life of the loan (if the down payment was under 10%), rather than automatically dropping off once equity reaches 20% the way conventional PMI typically does. Some FHA borrowers refinance into a conventional loan later specifically to eliminate MIP once they've built enough equity.
Definitions You'll Need
- MIP (Mortgage Insurance Premium) — FHA's version of mortgage insurance, both an upfront and an ongoing monthly charge.
- Life-of-loan MIP — MIP that continues for the full loan term when the down payment is under 10%.
Step-by-Step Example: The Real Cost of MIP
On a $320,000 home with 3.5% down at 6.5% over 30 years:
Upfront MIP (1.75%) = $5,404, financed into loan
Monthly MIP (0.55% annual) ≈ $144/month, in addition to P&I
That $144/month MIP charge, multiplied over many years, adds up to a substantial sum — one reason some FHA borrowers refinance into a conventional loan once they've built 20% equity, specifically to eliminate ongoing mortgage insurance.
FHA vs. Conventional Comparison Table
On a $320,000 home, 3.5% down:
| Loan Type | Est. Monthly Cost |
|---|---|
| FHA (3.5% down) | ≈$2,240 (incl. MIP) |
| Conventional (3.5% down, PMI) | ≈$2,180-2,300 (varies by credit) |
Errors Worth Avoiding With FHA Loans
- Not comparing against conventional with good credit — conventional PMI can sometimes beat FHA MIP.
- Forgetting MIP often lasts the life of the loan — unlike conventional PMI which typically cancels at 78-80% LTV.