FHA Loan Calculator

An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development (HUD). It was designed to help buyers who have smaller down payments or lower credit scores become homeowners. The trade-off is mortgage insurance: every FHA loan carries an upfront mortgage insurance premium (UFMIP) and an annual MIP, and this FHA loan calculator builds both into your monthly number so you see what an FHA mortgage really costs - not just the principal and interest.

A worked example

Suppose you buy a $350,000 home with the minimum 3.5% down ($12,250) on a 30-year FHA loan at 6.5%. Your base loan is $337,750. FHA charges an upfront MIP of 1.75% of that base loan - about $5,911 - which is financed into the loan, so the amount you actually borrow and amortize is roughly $343,661. The principal-and-interest payment on that total is about $2,172 per month. On top of that, the annual MIP of 0.55% of the loan per year adds about $158 per month, for a combined $2,330 per month before you add property tax and homeowners insurance. That MIP is the price of getting in with so little money down.

How the FHA payment is calculated

The principal-and-interest portion uses the standard amortization formula, applied to the total financed loan:

where P is the total loan (base loan + financed UFMIP), r is the monthly interest rate (annual rate ÷ 12), and n is the number of payments (years × 12). The two FHA-specific charges are layered in like this:

• Base loan = home price − down payment.
• Upfront MIP = 1.75% × base loan, financed into the loan (added to the amount you borrow).
• Total loan = base loan + upfront MIP - this is what you amortize.
• Monthly MIP = (0.55% × total loan) ÷ 12, added to each payment.

The full monthly figure this calculator reports is principal + interest + monthly MIP. Property tax, insurance and HOA are extra.

How to use this FHA calculator

1. Home price: enter the purchase price of the property.
2. Down payment: type a percentage. The minimum is 3.5% for a credit score of 580+; the quick buttons let you compare 3.5%, 5%, 10% and 20%.
3. Loan term: choose 30, 25, 20 or 15 years. A shorter term raises the payment but cuts total interest.
4. Interest rate: use a current quoted FHA rate, or a recent average for your credit tier as a placeholder.
5. Calculate: read your monthly P&I plus MIP at the top, then check the loan summary for the financed UFMIP and total loan, and the amortization table for the year-by-year balance.

Who FHA loans are for

• First-time buyers who have saved a smaller down payment and want the 3.5% minimum.
• Borrowers with fair credit - FHA accepts scores as low as 580 at 3.5% down (and 500-579 with 10% down).
• Buyers with higher debt-to-income ratios, since FHA underwriting is generally more flexible than conventional.
• Repeat buyers in higher-cost areas who fit within their county's FHA loan limit.

FHA is not only for first-timers - anyone who meets the requirements and stays within the loan limit can use it - but the long-lasting MIP means it often makes the most sense as a stepping stone you later refinance out of.

Key FHA terms explained

• UFMIP (upfront MIP): a one-time 1.75% fee on the base loan, usually financed into the loan rather than paid in cash.
• Annual MIP: ongoing mortgage insurance, 0.55%/yr of the loan for most 30-year FHA loans, billed monthly.
• Base loan: the loan before the upfront MIP is added - price minus down payment.
• Total loan: base loan plus financed UFMIP; the figure that is amortized.
• LTV (loan-to-value): loan divided by home value. FHA's low down payment means a high starting LTV.
• FHA loan limit: the maximum loan FHA will insure in your county, set annually by HUD.

Scenario one: minimum down vs. 10% down

On that same $350,000 home at 6.5% over 30 years, putting 10% down ($35,000) instead of 3.5% gives a base loan of $315,000, a financed UFMIP of about $5,513, and a total loan near $320,513. The P&I drops to roughly $2,026 per month and monthly MIP to about $147 - and with 10% or more down, the annual MIP can fall off after 11 years instead of lasting the life of the loan. The larger down payment costs more cash up front but reduces both the payment and how long you pay mortgage insurance.

Scenario two: 30-year vs. 15-year FHA

Take the 3.5%-down example with a total loan near $343,661. On a 30-year term at 6.5% the P&I is about $2,172/month. On a 15-year term at, say, 5.9%, the P&I jumps to roughly $2,881/month, but you pay dramatically less total interest and build equity far faster. Shorter FHA terms can also carry a lower annual MIP rate under HUD's schedule. Switch the term in the calculator to see the total-interest difference for your numbers.

What changes the result the most

• Home price and down payment: together they set the base loan, the single biggest driver of the payment.
• Interest rate: each 1% of rate changes a 30-year P&I payment by roughly 10-12%.
• Term length: 30 vs. 15 years swings the payment sharply and changes total interest the most.
• The financed UFMIP: 1.75% of the base loan is added to what you borrow, nudging both the payment and total interest up.
• Annual MIP: a steady monthly add-on that, for low-down-payment loans, lasts the life of the loan.

Tips for FHA borrowers

• Compare against conventional: if your credit is strong, a conventional loan with cancelable PMI may beat FHA's life-of-loan MIP over time.
• Plan an exit: many FHA borrowers refinance to a conventional loan once they reach about 20% equity to shed the MIP.
• Ask about seller concessions: FHA lets sellers contribute up to 6% of the price toward closing costs.
• Check your county limit: make sure the loan you need fits within HUD's FHA limit for your area before you rely on the estimate.
• Mind the down-payment source: FHA allows gift funds for the down payment, which can help if your savings are tight.

Limitations and assumptions

• It assumes a fixed interest rate and that the upfront MIP is financed into the loan rather than paid in cash.
• It uses the common rates - 1.75% UFMIP and 0.55%/yr annual MIP for most 30-year loans; HUD applies different annual MIP rates for some terms, loan amounts and loan-to-value tiers.
• It does not include property tax, homeowners insurance, HOA dues, or closing costs.
• It does not enforce county FHA loan limits or check borrower eligibility.
• It does not model MIP cancellation timing (life-of-loan vs. 11-year drop-off) in the schedule.

How it compares to related calculators

This page answers "what would an FHA loan cost me per month?" For other questions, a sister tool fits better:

• For a conventional payment with taxes, insurance and PMI, use the Mortgage Calculator.
• To find your maximum price from your income, use the Home Affordability Calculator.
• To plan how much to save for a down payment, use the Down Payment Calculator.
• To compare your current loan against a new one (including an FHA-to-conventional move), use the Refinance Calculator.
• For a full payment-by-payment breakdown, use the Amortization Calculator.

Sources

• U.S. Department of Housing and Urban Development (HUD) - FHA mortgage insurance, down payment rules and loan limits.