An FHA loan calculator estimates the monthly payment on a Federal Housing Administration mortgage, including both the upfront mortgage insurance premium (UFMIP) and the annual MIP that FHA borrowers must pay on top of principal and interest. Enter your home price, down payment, interest rate, and term, the calculator splits out P&I, monthly MIP, and the upfront MIP that gets financed into the loan.
FHA loans are designed for first-time and lower-credit buyers: the minimum down payment is 3.5% with a credit score of 580 or higher, versus the 5–20% typical of conventional loans. The trade-off is mortgage insurance. The 1.75% upfront MIP is rolled into the loan balance at closing, so you finance it over 30 years rather than paying cash. The 0.55% annual MIP is added to every monthly payment and, under current rules, stays for the life of the loan if you put down less than 10%, unlike conventional PMI, which falls off automatically at 78% loan-to-value. Borrowers who put down 10% or more drop MIP after 11 years.
Key takeaway
The MIP is the real cost of the FHA program. On a $300K loan with 3.5% down, the lifetime MIP burden is roughly $60K on top of interest, and you can't cancel it without refinancing into a conventional loan once you have 20% equity. FHA is the right tool when you can't qualify for conventional financing, but plan a refinance into your long-term cost analysis.
How it's calculated
FHA monthly payment combines two parts:
- Principal & interest on the total loan amount, where total = base loan + upfront MIP (1.75%). The upfront MIP is financed, so you pay interest on it for the life of the loan.
- Monthly MIP = base loan × 0.0055 ÷ 12. Note this uses the base loan amount, not the total, UFMIP isn't double-charged.
Principal & interest uses the standard amortization formula: M = P × r(1+r)^n / ((1+r)^n − 1), where P is the total loan amount, r is the monthly rate, and n is months. The result plus monthly MIP is your full FHA payment (excluding taxes, homeowners insurance, and HOA).
Source: HUD FHA Single Family Housing Policy Handbook (4000.1), MIP rates and amortization
Examples
$300,000 home, 3.5% down, 6.5% over 30 years
- Home price $300,000
- Down payment 3.5%
- Interest rate 6.5%
- Loan term 30 years
On a $300K home with FHA's minimum 3.5% down at 6.5% over 30 years, the base loan is $289,500. UFMIP of 1.75% adds $5,066 to the loan, bringing the total financed amount to $294,566. The principal-and- interest payment is $1,863, plus $133/month MIP, for a total of $1,995/month before taxes and insurance. Over 30 years, that $133 monthly MIP compounds to about $48K, roughly 16% of the home price, a significant invisible cost of the FHA program.
$450,000 home, 10% down, 6.75% over 30 years
- Home price $450,000
- Down payment 10%
- Interest rate 6.75%
- Loan term 30 years
With 10% down on a $450K home, the base loan is $405,000 and UFMIP adds $7,088, totaling $412,088 financed. P&I is $2,673, plus $186/month MIP, for a total of $2,859. The big advantage at 10% down: MIP drops off after 11 years instead of staying for the full term, saving roughly $25K vs. a 3.5% down FHA loan over the same period.
Frequently asked questions
Why does FHA mortgage insurance last for the life of the loan?
Under rules in effect since 2013, FHA borrowers who put down less than 10% pay annual MIP for the entire loan term, there's no automatic cancellation at 78% loan-to-value the way conventional PMI works. Borrowers with 10% or more down get MIP cancelled after 11 years. The only way to drop MIP early on a low-down-payment FHA loan is to refinance into a conventional loan once you've built up 20% equity (typically 3–5 years in a normal market).
How is FHA's 1.75% upfront MIP paid?
The upfront MIP is almost always financed into the loan, added to your principal balance at closing. On a $289,500 base loan, UFMIP of $5,066 brings the total financed amount to $294,566, and you pay interest on the full amount over 30 years. You technically can pay it cash at closing, but most borrowers choose to finance it because cash is tight in a 3.5%-down FHA scenario. Either way, UFMIP is non-refundable except via a partial refund if you refinance into another FHA loan within the first 3 years.
Is an FHA loan always more expensive than a conventional loan?
Not always. FHA wins for borrowers with credit scores below ~700, where conventional rates and PMI premiums get expensive. Above ~720 credit, conventional with PMI is usually cheaper, and PMI falls off at 78% LTV, making FHA's life-of-loan MIP a deal-breaker for stronger borrowers. Run the numbers both ways: an FHA loan at 6.5% with 0.55% MIP behaves like a conventional 7.1% in monthly terms, so a conventional quote at 6.9% with cancellable PMI may beat it overall.
What's the difference between MIP and PMI?
MIP (Mortgage Insurance Premium) is the FHA-specific insurance: a 1.75% upfront fee plus 0.55% annual, paid to the federal government to back the FHA program. PMI (Private Mortgage Insurance) is what conventional lenders require when you put down less than 20%, paid to a private insurer. The big difference: PMI cancels automatically at 78% LTV; MIP usually doesn't. PMI rates also vary by credit score (better credit = cheaper PMI), while MIP rates are flat regardless of credit.