What this calculator does
Find out what your monthly payment would be on an FHA loan, including its mortgage insurance. An FHA loan is a mortgage insured by the Federal Housing Administration, which is part of HUD. Because the government protects the lender if you stop paying, FHA loans allow as little as 3.5% down. They also accept lower credit scores than most conventional (non-government) loans.
You pay for that protection with mortgage insurance, called MIP (mortgage insurance premium). It comes in two parts. The upfront MIP is 1.75% of the loan, and it's usually added to what you borrow. The annual MIP is a yearly charge, paid in small pieces with each monthly payment.
The calculator starts from the price and your down payment and adds the upfront fee. It works out the loan payment and looks up your annual MIP rate in HUD's current table. Then it adds property tax, home insurance and any HOA dues. It also shows how long you'll pay MIP and roughly what it costs in total.
Where it's used
Why this math matters outside the classroom:
- First-time buyers. A buyer with $10,500 saved can put 3.5% down on a $300,000 home with an FHA loan, borrowing $289,500 plus the upfront premium.
- Upfront premium. On a $289,500 base loan, the 1.75% upfront mortgage insurance premium is 0.0175 × 289,500, which is $5,066.25.
- Comparing down payments. Moving from 3.5% to 10% down on a $300,000 FHA loan lowers the annual MIP rate from 0.55% to 0.50% and ends it after 11 years.
- FHA versus conventional. Loan officers set the FHA payment beside a conventional quote with PMI to show a borrower which costs less over the years they plan to stay.
- Housing counseling. Counselors walk clients through a monthly payment made of principal, interest, insurance premiums, tax and homeowners insurance.
Grade level and standards: Grades 11–12; Common Core State Standards for Mathematics HSA.SSE.B.4. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.
How to use it
- Enter the home price and your down payment, as a percent or a dollar amount. Then pick your credit score range.
- Enter the interest rate and the loan term (FHA loans run up to 30 years). Choose whether to add the upfront MIP to the loan.
- Add your yearly property tax and home insurance, and any monthly HOA dues.
- Read your first-year monthly payment and what it's made of. Then check the table to see the MIP for each year you pay it.
What the inputs mean
- Home price
- FHA compares the loan with the lower of the price and the appraised value (what an appraiser says the home is worth). Here the price stands in for both.
- Down payment
- FHA's minimum is 3.5% of the price with a credit score of 580 or more, and 10% with a score of 500 to 579. Scores under 500 don't qualify. A gift from family can usually cover the down payment.
- Credit score
- Lenders use a 'decision' score. That's the middle of your three credit bureau scores, and the lowest one among everyone on the loan. Many lenders set their own minimum, higher than FHA's.
- Loan term
- The annual MIP table has one set of rates for loans longer than 15 years, and a cheaper set for 15 years or less.
- Add the upfront MIP to the loan
- You can pay the upfront MIP in cash at closing or add it to the loan. Adding it means you pay interest on it, but it keeps more cash in your pocket.
Formula and method
base loan = price − down payment; LTV = base loan ÷ price upfront MIP = 1.75% × base loan; total loan = base loan + upfront MIP (if financed) P&I = L × i ÷ (1 − (1 + i)^(−n)), i = rate ÷ 12, n = years × 12 annual MIP rate: from HUD's table by term, LTV and base loan (e.g. 0.55% over 15 years, LTV > 95%) monthly MIP = annual rate × average scheduled base-loan balance for the year ÷ 12 total = P&I + MIP + tax ÷ 12 + insurance ÷ 12 + HOA
In the formulas, the base loan is the price minus your down payment. LTV (loan-to-value) is the base loan as a percent of the price: 96.5% LTV means you borrow 96.5% of the price. P&I is principal and interest, the loan part of your payment. L is the total amount you borrow, i is the monthly interest rate and n is the number of monthly payments.
For loans longer than 15 years with a base loan of $726,200 or less, HUD charges 0.50% a year at an LTV of 95% or less, and 0.55% above 95%. Larger loans pay 0.70% or 0.75%. For loans of 15 years or less, the rates are 0.15% to 0.65%.
When the LTV starts at 90% or less, MIP stops after 11 years. Above 90%, it lasts for the whole loan. Then the only way out is to refinance or pay off the loan.
HUD bases each year's premium on the average balance you're scheduled to owe that year, not on the starting loan. So the monthly MIP falls a little each year. The upfront premium isn't counted in that balance. The calculator follows the same method and adds up the yearly premiums for the total.
Worked example
A $300,000 home with 3.5% down and a 580+ credit score, a 6.25% rate over 30 years with the upfront MIP financed, $3,300 a year of property tax and $1,500 of insurance.
- Base loan: $300,000 − 3.5% = $289,500. That's an LTV of 96.5%.
- Upfront MIP: 1.75% × $289,500 = $5,066.25, so you borrow $294,566.25 in all.
- Principal and interest at 6.25% for 360 months: about $1,813.70.
- An LTV over 95% on a 30-year loan under $726,200 means 0.55% a year for the whole loan. The scheduled base balance averages $287,962.67 in year 1. So MIP is $287,962.67 × 0.55% ÷ 12 = $131.98 a month.
- Tax and insurance: $3,300 ÷ 12 = $275 and $1,500 ÷ 12 = $125. Total: $1,813.70 + $131.98 + $275 + $125 = $2,345.68.
Result: The estimated first-year payment is $2,345.68 a month, and $131.98 of it is mortgage insurance. Because the down payment is under 10%, MIP stays for all 30 years.
Understanding the result
Compare the MIP line with the PMI (private mortgage insurance) a conventional lender quotes you. FHA often wins for people with lower credit scores. With strong credit, conventional PMI is often cheaper, and it can be cancelled once you own 20% of the home.
Putting 10% down instead of 3.5% does more than shrink the loan. It lowers the MIP rate to 0.50% and ends MIP after 11 years. In the default example, that cuts total MIP from about $31,000 to about $13,700.
The total is a first-year figure. Principal and interest stay the same, MIP slowly goes down each year, and tax and insurance usually go up.
Assumptions and limitations
- The annual MIP rates are FHA's rates for loans with case numbers endorsed on or after March 20, 2023. They and the 1.75% upfront premium come from HUD Mortgagee Letter 2023-05, and they were still current in October 2026.
- A regular fixed-rate mortgage (a forward mortgage, not a reverse mortgage), paid at the end of each month. The price equals the appraised value.
- MIP for each year uses the average of the 12 balances you're scheduled to owe at the start of each month that year, on the base loan.
- FHA loan limits vary by county and change every January. The calculator doesn't check them, so look up your county's limit before counting on a large loan.
- The $726,200 base-loan amount that splits the lower and higher annual MIP rates is the figure printed in HUD Mortgagee Letter 2023-05. If your base loan is near or above it, confirm the current amount and rate with your lender.
- Closing costs, seller credits, escrow cushions and lender fees aren't included. Your lender's rounding may also differ by a few cents.
- Streamline refinances of older FHA loans, Hawaiian Home Lands loans and other special programs use different premiums.
- This is an estimate, not a loan offer. The Loan Estimate from your lender is the official figure.
Frequently asked questions
What is the FHA mortgage insurance premium in 2026?
The upfront premium is 1.75% of the base loan. For most buyers with a 30-year loan under $726,200, the annual premium is 0.55% if they put down less than 5%. With 5% or more down, it's 0.50%. These rates have applied since March 20, 2023.
Can I get rid of FHA mortgage insurance?
If your loan-to-value started at 90% or less (10% or more down), MIP ends after 11 years. Otherwise it lasts for the life of the loan. Most people remove it by refinancing into a conventional loan once they own about 20% of the home.
What credit score do I need for an FHA loan?
FHA itself allows 3.5% down with a score of 580 or higher, and 10% down with 500 to 579. Many lenders add their own minimum, often around 620, so check with yours.
Is the upfront MIP included in my down payment?
No. It's a separate charge of 1.75% of the base loan. Most people add it to the loan, which raises the monthly payment slightly. Paying it in cash keeps the loan smaller, but you need more money at closing.
Why does my FHA payment change slightly each year?
The annual MIP is worked out again each year from the average balance you're scheduled to owe. So it shrinks a little as you pay the loan down. Property tax and insurance paid through your lender (escrow) can also change.
Sources
- HUD Mortgagee Letter 2023-05: Reduction of FHA Annual MIP Rates (checked 2026-10-19)
- HUD Housing Counseling Training Module 2.2 (FHA credit score and LTV limits) (checked 2026-10-19)
How this calculator is checked
Method: Standard level-payment formula; FHA upfront (175 bps) and annual MIP rates, durations and the $726,200 base-loan threshold from HUD Mortgagee Letter 2023-05; the average-scheduled-balance method from HUD's premium calculation page; minimum down payments by credit score from HUD housing counseling materials (figures in src/lib/finance/housing-2026.ts). The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-18. Found a problem? Tell us.
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