FHA Loan Calculator
Calculate your FHA mortgage payment with both upfront and annual mortgage insurance included. Adjust your down payment to see how it affects MIP duration and your monthly cost.
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How the FHA Calculator Works #
This calculator computes your monthly FHA mortgage payment using the standard amortization formula — with the addition of both upfront and annual mortgage insurance premiums that are unique to FHA loans. Enter your home price, down payment, and interest rate, and the calculator breaks your payment into principal and interest, property tax, homeowner's insurance, and the monthly MIP charge.
The upfront mortgage insurance premium (UFMIP) of 1.75% is calculated on the base loan amount and is typically financed into the loan. For example, a $400,000 home with 3.5% down has a base loan of $386,000, a UFMIP of $6,755, and a total financed amount of $392,755. The annual MIP is then calculated on the base loan amount and added to your monthly payment.
Understanding FHA Mortgage Insurance #
FHA loans require two types of mortgage insurance that protect the lender in case of default. Together, these premiums fund the FHA insurance program and are the trade-off for the low down payment requirement.
Upfront Mortgage Insurance Premium (UFMIP): A one-time fee of 1.75% of the base loan amount. On a $386,000 loan, the UFMIP is $6,755. Most borrowers finance this into the loan rather than paying it out of pocket at closing. When financed, you pay interest on the UFMIP over the life of the loan.
Annual Mortgage Insurance Premium (MIP): An ongoing monthly charge based on your loan-to-value ratio and loan term. For most 30-year FHA loans, the annual MIP rate is typically between 0.50% and 0.55% of the base loan amount. This translates to roughly $160–$177 per month on a $386,000 loan. Unlike conventional PMI, FHA MIP cannot be automatically cancelled at 20% equity — the cancellation rules depend on your initial down payment.
MIP Cancellation Rules #
Whether your FHA mortgage insurance can be cancelled depends on how much you put down when you originally took out the loan. The table below summarizes the current rules for FHA loans originated after June 3, 2013:
| Down Payment | MIP Duration | Notes |
|---|---|---|
| 10% or more | 11 years | MIP automatically drops off after 11 years of payments |
| Less than 10% | Life of loan | MIP remains for the entire loan term; refinance to remove |
For borrowers who put less than 10% down — including the minimum 3.5% — the only way to eliminate MIP is to refinance into a conventional loan once you have sufficient equity (typically 20% or more). This is a common strategy once home values appreciate or you've paid down enough principal.
FHA vs. Conventional Mortgage #
FHA loans are designed for borrowers who may not qualify for conventional financing, particularly those with lower credit scores or limited savings for a down payment. The minimum 3.5% down payment is significantly lower than the 5%–20% typically required for conventional loans. However, FHA loans come with mandatory mortgage insurance that can make them more expensive over the long term.
On a $400,000 home, a conventional borrower putting 20% down ($80,000) avoids PMI entirely and finances only $320,000. An FHA borrower with 3.5% down ($14,000) finances $392,755 (including the UFMIP) and pays monthly MIP on top of that. The FHA borrower's monthly payment is typically higher, but the barrier to entry is much lower — $14,000 down versus $80,000.
If you can put 20% down and have good credit, a conventional loan is typically the better financial choice. If you need a low down payment and have a credit score in the 580–700 range, FHA is often the more accessible path to homeownership.
Frequently Asked Questions #
What is FHA mortgage insurance?
FHA mortgage insurance consists of two parts: an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, usually financed into the loan, and an annual mortgage insurance premium (MIP) paid monthly. The annual MIP rate depends on your loan term and loan-to-value ratio, typically ranging from 0.50% to 0.55% for 30-year loans. Both premiums protect the lender and fund the FHA insurance program.
How much is the FHA upfront MIP?
The FHA upfront mortgage insurance premium (UFMIP) is 1.75% of the base loan amount. On a $386,000 loan (3.5% down on a $400,000 home), the UFMIP would be $6,755. Most borrowers roll this into the loan balance rather than paying it at closing, which increases the total amount financed but avoids the large upfront cash outlay.
When does FHA MIP cancel?
If you put 10% or more down on your FHA loan, the annual MIP cancels automatically after 11 years. If you put less than 10% down (including the 3.5% minimum), MIP remains for the entire life of the loan. The only way to remove it is to refinance into a conventional loan once you have at least 20% equity in the home.
What is the minimum FHA down payment?
The minimum FHA down payment is 3.5% of the purchase price for borrowers with a credit score of 580 or higher. On a $400,000 home, that's $14,000. Borrowers with credit scores between 500 and 579 typically need at least 10% down. The down payment can come from savings, gifts from family, or eligible down payment assistance programs.
Can I refinance out of FHA MIP?
Yes. Once you've built enough equity in your home — typically 20% or more — you can refinance from an FHA loan into a conventional mortgage to eliminate the monthly MIP. Many homeowners pursue this strategy after a few years of payments or when home values increase. You'll need to meet the conventional lender's requirements for credit score, debt-to-income ratio, and appraisal value at the time of refinancing.