FHA Loan Calculator

What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency. Because the FHA guarantees the loan, lenders can offer more lenient qualification requirements, meaning lower credit scores and smaller down payments, which puts homeownership within reach for more buyers.

Minimum Requirements

• Minimum down payment: 3.5% (with a credit score of 580 or higher)
• Minimum credit score: 500 (with 10% down if score is 500–579)
• Debt-to-income ratio: Up to 57% in some cases
• Loan limits (2024): Vary by county; typically $498,257 to $1,149,825

How Monthly Payments Are Calculated

Step 1: Calculate the loan amount

Loan Amount = Home Price − Down Payment

Step 2: Add the Upfront MIP

Upfront MIP = Loan Amount × 1.75%
Financed Loan = Loan Amount + Upfront MIP

(The upfront MIP is usually rolled into the loan, not paid at closing.)

Step 3: Calculate Principal and Interest

Standard amortization formula on the Financed Loan.

Step 4: Add Annual MIP (monthly)

Annual MIP runs from 0.15% to 0.75% of the loan a year, set by the term, the loan-to-value ratio and whether the base loan is above $726,200. The common case, a 30-year loan with 3.5% down, pays 0.55%. The yearly premium is divided by 12 and added to each payment.

Those premium rates are set by the FHA, not by your lender, and they do move: the annual premium was cut by 0.30 of a point across the board in March 2023. The calculator uses that schedule, so check the current figure with your lender before signing anything.

Total Monthly Payment

Monthly Payment = P&I + Monthly MIP + Property Tax + Homeowner's Insurance

(This calculator covers P&I and MIP. Property tax and insurance vary by location.)

When Does MIP End?

• Down payment ≥ 10%: MIP cancels after 11 years
• Down payment < 10%: MIP lasts the entire loan term, which is the single largest cost difference against a conventional loan

That 11-year line is worth more than it looks. On a $350,000 home the difference between 3.5% down and 10% down is about $22,750 more cash at closing, and it buys you back nineteen years of mortgage insurance on a 30-year loan. The calculator totals both so you can see the trade in dollars rather than in principle.

FHA vs. Conventional

A conventional loan with 20% down has no PMI and a lower total cost over the loan life. However, if you cannot afford 20% down and need to get into a home, FHA’s lower credit score requirements and 3.5% down payment can be the difference between renting and owning.

Who Should Use an FHA Loan?

First-time homebuyers, those with less-than-perfect credit, or buyers with limited savings for a down payment. Once you have 20% equity, you can refinance into a conventional loan to eliminate MIP.