FHA Loan Calculator
FHA Loan Calculator
Choosing between an FHA loan and a conventional loan requires comparing the total cost over time, not just the down payment requirement. For a borrower with a 620 credit score and 5 percent down payment on a $300,000 home, an FHA loan at 6.5 percent with 0.55 percent MIP produces a total monthly payment of about $2,164 including MIP and estimated taxes and insurance. A conventional loan at 7 percent with 15 percent down and private mortgage insurance of 0.8 percent produces a payment of about $2,050.
The conventional loan example requires substantially more cash upfront, but the PMI can be canceled once you reach 20 percent equity. FHA MIP on loans with less than 10 percent down lasts the entire loan term, adding tens of thousands of dollars in extra cost. On a $300,000 FHA loan, lifetime MIP at 0.55 percent over 30 years exceeds $49,000. Conventional PMI at 0.8 percent that is canceled after 7 years costs about $14,000.
Borrowers with strong credit scores (720 or higher) should carefully compare both options. FHA loans often have lower interest rates than conventional loans for low-credit borrowers, but the mandatory MIP structure may offset this advantage. The FHA loan is generally more attractive for borrowers with credit scores below 660, limited down payment funds, or higher debt-to-income ratios.
For more information, see the Down Payment Calculator.
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development. [hud-fha] FHA loans have helped more than 40 million homebuyers achieve homeownership since the program was created in 1934. The program was originally designed to stimulate the housing market during the Great Depression by making mortgages more accessible and affordable for average American families. FHA loans are designed to help lower-income and first-time homebuyers purchase homes by requiring lower down payments and credit scores than conventional loans. The FHA does not lend money directly; instead, it insures the loan so that if the borrower defaults, the lender is protected against loss.
The key advantage of an FHA loan is the low down payment requirement. Borrowers can qualify with as little as 3.5% down if they have a credit score of 580 or higher. Those with credit scores between 500 and 579 may still qualify with a 10% down payment. This makes homeownership accessible to many people who would otherwise be unable to save the 5% to 20% down payment required by conventional loans.
However, FHA loans come with additional costs in the form of mortgage insurance premiums. There are two types: an Up-Front Mortgage Insurance Premium of 1.75% of the loan amount, which can be financed into the loan, and an annual Mortgage Insurance Premium paid monthly, which varies based on the loan amount and loan-to-value ratio.
FHA loans are particularly popular among first-time buyers, with approximately 80% of FHA borrowers being first-time homebuyers. The program also allows for flexible underwriting standards, including the ability to use gift funds for the down payment and closing costs.
For more information, see the Down Payment Calculator.
FHA offers a streamlined refinance program specifically for existing FHA borrowers who want to lower their interest rate with minimal documentation. The FHA streamline refinance does not require a credit check, income verification, or a new appraisal in most cases. This makes it one of the fastest and least expensive refinancing options available. Closing costs are typically lower than a conventional refinance, and the UFMIP of 1.75 percent still applies but can be financed into the loan.
To qualify for an FHA streamline refinance, you must currently have an FHA-insured mortgage, be current on all payments with no late payments in the past six months, and demonstrate a net tangible benefit from the refinance. The net tangible benefit requirement means that the new loan must result in a lower monthly payment, a shorter term, or a switch from an adjustable-rate to a fixed-rate mortgage. If your monthly payment drops by at least 5 percent, you generally meet this requirement.
The downside of the FHA streamline program is that MIP requirements remain unchanged. If your current FHA loan required lifetime MIP because you put less than 10 percent down, the new streamline loan will also require lifetime MIP. The streamline program does not eliminate MIP or change its duration. For this reason, borrowers who have built significant equity may prefer a conventional refinance to eliminate mortgage insurance entirely.
Enter the purchase price of the home and the down payment amount or percentage. FHA loans require a minimum down payment of 3.5% for borrowers with credit scores of 580 or higher. Enter the annual interest rate and loan term, typically 15 or 30 years.
Enter the UFMIP rate, which is currently 1.75% for most FHA loans. You can choose whether to finance the UFMIP into the loan principal or pay it upfront at closing. Enter the annual MIP rate, which varies by loan-to-value ratio and term. For a 30-year FHA loan with less than 5% down, the annual MIP is typically 0.55%.
Press Calculate to see the full monthly payment breakdown. For example, a $300,000 home with 3.5% down and a 6.5% interest rate on a 30-year FHA loan would have a total monthly payment of approximately $2,195 including MIP and estimated taxes and insurance.
If the UFMIP is financed into the loan, the effective principal becomes:
Where P is the base loan amount and u is the UFMIP rate (typically 1.75%).
The monthly principal and interest payment uses the standard amortization formula:
Where i is the monthly interest rate and N is the total number of monthly payments.
The monthly MIP is calculated as:
FHA loan comparison at 6.5% interest, 30-year term, 0.55% MIP, $200 taxes and insurance:
| Down Pmt | Base Loan | Eff. Loan | P&I | MIP | Total |
|---|---|---|---|---|---|
| 3.5% | $289,500 | $294,566 | $1,862 | $133 | $2,195 |
| 5% | $285,000 | $289,988 | $1,833 | $131 | $2,164 |
| 10% | $270,000 | $274,725 | $1,737 | $124 | $2,061 |
The 1.75% UFMIP can be financed into your loan, reducing closing costs but increasing your monthly payment slightly. If you have sufficient cash, paying it upfront saves on total interest over the life of the loan.
FHA MIP is more expensive than conventional PMI in many cases. If you have a credit score of 720 or higher, compare an FHA loan with 3.5% down against a conventional loan with 5% down. The conventional loan may have a lower total monthly payment even with a larger down payment.
FHA loans are assumable, meaning a buyer can take over your FHA loan at the same interest rate. This can be a significant selling advantage if interest rates rise. FHA also offers a streamlined refinance program with reduced documentation requirements.
FHA MIP rates change periodically based on HUD guidelines and market conditions. The calculator does not include property taxes, homeowners insurance, or HOA fees unless you enter them separately. FHA loans have maximum loan limits that vary by county.
This tool does not determine eligibility, funding rules, or lender overlays. Consult official FHA resources for exact percentages and current guidelines. FHA loan limits are updated annually by HUD and vary by county based on median home prices. In 2026, the standard FHA loan limit for a single-family home is $498,257 in most areas, but in high-cost counties like those in the San Francisco Bay Area, New York City, and Washington D.C., the ceiling reaches $1,149,825. Alaska, Hawaii, Guam, and the U.S. Virgin Islands have even higher limits due to construction costs. These limits apply to the total mortgage amount, not the home purchase price, so a buyer putting 3.5 percent down on a home priced at $515,000 in a standard-cost area would exceed the FHA limit and would need a larger down payment or a conventional loan.
FHA loans are mortgages insured by the Federal Housing Administration, designed to help lower-income and first-time homebuyers access homeownership. The FHA does not set interest rates — those are determined by individual lenders based on market conditions and borrower qualifications. However, FHA loans often have lower interest rates than conventional loans for borrowers with lower credit scores because the government guarantee reduces lender risk. This rate advantage can partially offset the cost of mortgage insurance premiums, making FHA loans competitively priced for many borrowers despite the additional insurance costs. With down payments as low as 3.5 percent and more flexible qualification requirements, FHA loans are an attractive option for many borrowers. This calculator helps you estimate your monthly payment including principal, interest, mortgage insurance premiums (MIP), and other costs associated with FHA financing.
- What is the minimum down payment for an FHA loan?
- 3.5% with a credit score of 580 or higher. If your score is between 500 and 579, a 10% down payment is required.
- What is MIP and how much does it cost?
- MIP has two parts: upfront MIP of 1.75% of the loan amount paid at closing, and annual MIP of 0.15% to 0.75% paid monthly depending on loan term and LTV.
- What are the FHA loan limits for 2026?
- The single-family limit is $498,257 in most areas (floor). In high-cost areas, up to $1,149,825 (ceiling). Alaska, Hawaii, and territories have higher limits.
- What are the DTI limits for an FHA loan?
- FHA typically requires front-end DTI of 31% or less and back-end DTI of 43% or less. Strong borrowers with compensating factors may qualify up to 50%.
- Is MIP on an FHA loan cancelable?
- For loans with under 10% down, MIP lasts the entire loan term. With 10% or more down, MIP is canceled after 11 years. Refinancing to conventional removes MIP.
- [1]U.S. Department of Housing and Urban Development. (n.d.). FHA Mortgage Insurance.
- [2]U.S. Department of Housing and Urban Development. (n.d.). FHA Mortgage Insurance.
- [3]Consumer Financial Protection Bureau. (n.d.). What is an FHA Loan?
- [4]Bankrate. (n.d.). FHA Loan Rates and Guidelines.
- [5]NerdWallet. (n.d.). FHA Loans: Everything You Need to Know.
- [6]Investopedia. (n.d.). FHA Loan: Definition, Requirements, Benefits.
Last updated: July 10, 2026
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