FHA Loan Calculator

Two premiums, not one

Every FHA loan carries an upfront mortgage insurance premium of 1.75% of the base loan, which is almost always financed — added to the loan rather than paid in cash — so you pay interest on it for the life of the loan. On top of that is an annual MIP, charged monthly, that for most FHA loans today runs around 0.55% of the balance a year. This page includes both; a calculator that shows only principal and interest understates the FHA payment noticeably.

FHA MIP usually does not fall off

The critical difference from conventional PMI: on most FHA loans with the minimum down payment, monthly MIP lasts the entire life of the loan. It does not automatically cancel at 20% equity the way conventional PMI does. The common way out is to refinance into a conventional loan once you have enough equity — which is a decision, not an automatic event.

Why people choose FHA anyway

FHA accepts lower credit scores and a 3.5% down payment, which puts a home within reach for buyers who would not qualify for a conventional loan. The trade-off is the insurance cost above. For a buyer who can put 5% or more down with good credit, a conventional loan with cancellable PMI is often cheaper over time — worth comparing rather than assuming FHA is the low-cost option.

The numbers here are the common case, not every case

FHA premium rates depend on the loan term, the loan-to-value ratio and the loan amount. Loans of 15 years or with a larger down payment carry lower annual MIP, and very large loans carry more. This page uses the standard rates for a 30-year loan at the minimum down payment, which fits most FHA borrowers. Property tax and homeowners insurance sit on top of the figure shown and are not included, so the true monthly housing cost is higher than the payment here.

Frequently Asked Questions