Calculate FHA loan payments including upfront and annual mortgage insurance premiums. See total MIP cost and compare FHA vs conventional loan options.
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, designed to help first-time and lower-income homebuyers qualify for financing with a down payment as low as 3.5%. In exchange for the lower barrier to entry, FHA borrowers pay mortgage insurance premiums — both an upfront premium (UFMIP) financed into the loan and an annual premium (MIP) added to monthly payments.
This calculator computes your full FHA loan payment including principal, interest, and the monthly MIP charge. It also shows the upfront MIP cost, the total insurance premium you will pay over the life of the loan, and how the FHA option compares to a conventional mortgage with PMI.
FHA loans remain one of the most accessible paths to homeownership, particularly for borrowers with credit scores between 580 and 700 or limited savings for a down payment. Understanding the true cost — including insurance — is essential for making an informed decision.
FHA loans make homeownership possible for millions of buyers who cannot meet conventional down payment requirements. However, the mortgage insurance premiums add significant cost. This calculator reveals the total MIP expense so you can weigh the FHA option against saving for a larger down payment on a conventional loan.
The upfront MIP alone is 1.75% of the loan amount — on a $300,000 loan, that is $5,250 rolled into your balance. Combined with annual MIP of 0.55% for most borrowers, this insurance can total $40,000-$60,000 over the life of the loan.
Upfront MIP = Base Loan Amount × 1.75% Financed Loan = Base Loan + Upfront MIP Monthly P&I = Financed Loan × [r(1+r)^n] / [(1+r)^n − 1] where r = rate/12/100, n = term × 12 Monthly MIP = (Base Loan × Annual MIP Rate) / 12 Total Monthly = Monthly P&I + Monthly MIP Annual MIP rates (2024): 0.55% for ≤ 95% LTV, 30-year; 0.50% for 15-year.
Result: $2,362/month (incl. MIP)
A $350,000 home with 3.5% down ($12,250) has a base loan of $337,750. The upfront MIP adds $5,911, making the financed loan $343,661. At 6.25% over 30 years, P&I is $2,117/month. Monthly MIP at 0.55% adds $155/month, for a total of $2,272. Total MIP paid over 30 years is approximately $61,711 ($5,911 upfront + $55,800 in annual premiums).
FHA MIP comes in two forms. The upfront mortgage insurance premium (UFMIP) is 1.75% of the base loan amount, charged at closing but almost always financed into the loan. The annual mortgage insurance premium (MIP) ranges from 0.15% to 0.75% depending on the loan term, LTV ratio, and loan amount. For the most common scenario — a 30-year loan with less than 5% down — the annual rate is 0.55%.
Beyond the down payment and credit score minimums, FHA loans require the property to meet HUD minimum property standards (an FHA appraisal is more thorough than conventional), a debt-to-income ratio generally below 43% (though exceptions exist up to 50% with compensating factors), and proof of steady income. The home must be your primary residence.
FHA loans are most advantageous when your credit score is below 700 or you have limited savings. If your score is 740+ and you have 10% down, a conventional loan with PMI that cancels at 80% LTV is usually cheaper over the long run. The break-even point depends on how quickly you build equity and whether you plan to refinance.
FHA mortgage insurance (MIP) is required on all FHA loans. It consists of an upfront premium of 1.75% of the loan amount (usually financed) and an annual premium of 0.15-0.75% (paid monthly). This insurance protects the lender if you default, enabling them to offer loans with lower down payments.
For loans with less than 10% down (the most common scenario), MIP lasts for the entire life of the loan. For loans with 10% or more down, MIP drops off after 11 years. The only way to remove MIP earlier is to refinance into a conventional loan once you have 20% equity.
The minimum is 500 with a 10% down payment, or 580 with a 3.5% down payment. However, many FHA lenders set their own minimums higher — typically 620-640. Higher scores also qualify you for better interest rates.
For borrowers with good credit (720+) and 5-10% down, conventional with PMI is often cheaper because PMI cancels at 80% LTV while FHA MIP may last the full term. For borrowers with lower credit or minimal savings, FHA may be the only option and can still be cost-effective.
No. FHA loans are restricted to primary residences. You must live in the home as your principal residence for at least the first year. Using an FHA loan for a non-owner-occupied property is mortgage fraud.
FHA loan limits vary by county and are updated annually. In 2024, the floor is $498,257 and the ceiling (high-cost areas) is $1,149,825 for single-family homes. Check the HUD website for limits in your specific county.
Yes. The 1.75% upfront MIP is typically financed into the loan, increasing your total balance. On a $337,750 base loan, this adds $5,911 to your financed amount, which means you pay interest on the MIP as well.
Yes. Once you build 20% equity, you can refinance into a conventional loan to eliminate mortgage insurance entirely. FHA also offers streamline refinancing (FHA-to-FHA) with reduced documentation, which can lower your rate but keeps MIP.