FHA Loan Calculator
Calculate FHA loan payments including upfront and annual mortgage insurance premiums (MIP) with the 3.5% minimum down payment.
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How It Works
FHA loans are government-backed mortgages insured by the Federal Housing Administration. They are popular with first-time buyers because they require only 3.5% down with a 580+ credit score. The tradeoff is mortgage insurance premiums (MIP): a 1.75% upfront premium financed into the loan and an annual premium of 0.50-0.55% paid monthly.
The Formula
Total Loan = Base Loan + Upfront MIP
Annual MIP = Base Loan x MIP Rate (0.15% to 0.55%)
Monthly Payment = P&I on Total Loan + Monthly MIP
Variables
- UFMIP — Upfront Mortgage Insurance Premium - 1.75% of the base loan amount, typically financed into the loan
- MIP — Annual Mortgage Insurance Premium - 0.50% to 0.55% of the loan balance for 30-year terms
- LTV — Loan-to-Value ratio, determines MIP rate and duration
Worked Example
On a $300,000 home with 3.5% down: Down payment = $10,500, Base loan = $289,500. Upfront MIP = $289,500 x 1.75% = $5,066. Total loan = $294,566. Annual MIP at 0.55% = $1,592/year ($133/month). At 6.25%, monthly P&I = $1,814 + $133 MIP = $1,947 total.
Practical Tips
- FHA upfront MIP can be financed into the loan so you do not need extra cash at closing.
- With less than 10% down, FHA MIP lasts the entire life of the loan. With 10%+ down, MIP drops off after 11 years.
- To remove FHA MIP early, you must refinance into a conventional loan once you reach 20% equity.
- FHA loans have maximum loan limits that vary by county. Check HUD.gov for your area.
- FHA allows lower credit scores than conventional loans, but rates may be higher for scores below 680.
Frequently Asked Questions
What credit score do I need for an FHA loan?
You need a minimum 580 credit score for the 3.5% down payment option. Scores between 500-579 require a 10% down payment. Most lenders prefer 620+ and may have overlays above FHA minimums.
How long do I pay FHA mortgage insurance?
If your down payment is less than 10%, MIP lasts the life of the loan. If you put 10% or more down, MIP is removed after 11 years. The only way to eliminate MIP early with less than 10% down is to refinance into a conventional loan.
Can I use an FHA loan for a second home?
No, FHA loans are only for primary residences. You cannot use an FHA loan for investment properties or vacation homes.
What are FHA loan limits?
FHA loan limits vary by county. In 2025, the floor is $498,257 and the ceiling is $1,149,825 for high-cost areas. Check HUD.gov for limits in your specific county.
Is FHA or conventional better?
FHA is generally better for buyers with lower credit scores or smaller down payments. Conventional is better if you have 20% down (no PMI) or a credit score above 740 (better rates). Compare total costs including mortgage insurance for both.