FHA Loan Calculator

FHA Loan Calculator

FHA loans allow buyers with lower credit scores or smaller down payments to qualify for a mortgage through federal insurance backing. This calculator estimates your full monthly payment for an FHA purchase loan, including principal, interest, both upfront and annual mortgage insurance premiums (MIP), property taxes, and homeowners insurance — so you see the true all-in cost before applying.

How FHA Loan Payments Are Calculated

An FHA payment has more moving parts than a conventional loan. Here is how each piece is calculated:

• Base Loan Amount = Home Price — Down Payment
• Upfront MIP = Base Loan Amount x 1.75% (added to the loan balance if financed)
• Total Loan Amount = Base Loan Amount + Financed Upfront MIP
• Principal & Interest = Total Loan Amount x [r(1+r)^n] / [(1+r)^n - 1], where r = monthly rate, n = total months
• Annual MIP = Total Loan Amount x MIP Rate (0.55-1.05%), divided by 12 for the monthly charge
• Monthly PITI = Principal & Interest + Monthly MIP + Monthly Taxes + Monthly Insurance

The MIP rate depends on loan term, loan amount, and down payment percentage. For a 30-year loan over $150,000 with less than 10% down, the annual MIP rate is 0.55% as of 2026.

Worked Examples

Scenario 1 — First-time buyer, $280,000 home, 3.5% down, 680 credit score, 6.75% rate Down payment: $9,800. Base loan: $270,200. Upfront MIP financed: $4,729. Total loan: $274,929. Monthly P&I: $1,783. Monthly MIP: $126. Monthly taxes + insurance: ~$350. Total monthly payment: approximately $2,259.

Scenario 2 — $350,000 home, 5% down, 720 credit score, 6.5% rate, 30-year term Down payment: $17,500. Base loan: $332,500. Upfront MIP: $5,819 financed. Total loan: $338,319. Monthly P&I: $2,139. Monthly MIP: $155. Monthly taxes + insurance: ~$430. Total monthly payment: approximately $2,724.

Scenario 3 — $220,000 home, 10% down, 15-year FHA loan, 6.25% rate Down payment: $22,000. Base loan: $198,000. Upfront MIP: $3,465 financed. Total loan: $201,465. Monthly P&I: $1,725. Monthly MIP: $59 (lower MIP rate for 15-year term). Total monthly payment: approximately $2,134. MIP cancels after 11 years because of 10% down.

FHA vs Conventional Loan Reference

When to Use This Calculator

• You are a first-time buyer with a credit score in the 580-679 range and want to see if FHA beats conventional
• You are comparing the true cost of a 3.5% FHA down payment against a 5% conventional down payment
• You want to know when you can refinance out of FHA MIP into a conventional loan (typically once you reach 20% equity)
• You received a gift for your down payment and need to verify FHA allows it (it does — 100% gift funds are permitted)
• You are buying a 2-4 unit property as an owner-occupant and need a low-down-payment option

Common Mistakes

1. Underestimating the long-term cost of FHA MIP. For a $300,000 loan at 3.5% down, you will pay roughly $1,500 in annual MIP for the life of the 30-year loan — that is $45,000 over 30 years on top of interest. Conventional PMI drops at 20% equity, so a borrower with a 680+ score and 5% down may come out ahead with conventional over 10+ years.
2. Ignoring the upfront MIP. Rolling 1.75% into your loan means borrowing $5,250 extra on a $300,000 loan. You pay interest on that amount for the full loan term if you do not refinance.
3. Not getting lender quotes for both FHA and conventional. FHA is not always the cheaper path. If your credit score is 680+ and you have 5-10% down, run both scenarios — sometimes conventional PMI costs less per year than FHA MIP, and PMI cancels while MIP (in most cases) does not.
4. Missing the FHA loan limit for your county. In high-cost metro areas, FHA limits are substantially above the $498,257 floor but may still fall short of local home prices. If the home you want exceeds your county’s FHA limit, you need a conventional or jumbo loan.

Current Market Context for 2026

FHA loans remain the dominant low-down-payment option for buyers with credit scores below 680. FHA rates in early 2026 tracked 6.5-7.0% for a 30-year loan, running about 0.25% above comparable conventional rates but with easier qualification standards. The FHA loan floor increased to $498,257 for 2026 (up from $472,030 in 2024), expanding access in mid-cost markets. One key planning note: borrowers who put less than 10% down on FHA loans originated in 2026 will carry MIP for the life of the loan — making it worth running the math on refinancing to conventional once equity reaches 20-22%.

Tips

1. A 580 credit score qualifies you for 3.5% down, but a 620+ score typically gets you a noticeably lower interest rate — if you can spend 3-6 months improving your score, it often pays off
2. FHA allows the seller to cover up to 6% of the purchase price toward closing costs — negotiate this into your offer to reduce cash needed at closing
3. If you are between 3.5% and 10% down, consider pushing to 10% — MIP cancels at year 11 instead of lasting the full 30 years, saving $15,000-$25,000 on a typical loan
4. FHA loans are fully assumable, meaning a buyer can take over your loan at your original rate — a valuable selling point if rates rise in future years
5. The FHA 203(k) renovation loan lets you finance a home purchase and up to $35,000 in repairs in one loan — useful for buying a fixer-upper with limited cash

Related Calculations

• VA Loan Calculator: Compare FHA costs against zero-down VA loan costs if you have military eligibility
• Mortgage Calculator: Run a conventional loan comparison at the same home price and down payment
• Closing Cost Calculator: Estimate total upfront costs including FHA upfront MIP and lender fees
• Real Estate Affordability Calculator: Determine the maximum FHA purchase price given your income and debts
• Amortization Calculator: See a month-by-month payment schedule showing when your balance falls below key equity thresholds