FHA Loan Calculator – Payment with MIP

Estimate Your FHA Monthly Payment, Including Mortgage Insurance

FHA Loan Formula

Formula

\[ L = P \left(1 - \frac{d}{100}\right) \] \[ U = 0.0175 \, L, \qquad T = L + U \] \[ \text{P\&I} = \frac{T \cdot i}{1 - (1 + i)^{-12n}}, \qquad i = \frac{r}{1200} \] \[ \text{MIP}_{mo} = \frac{T \cdot a}{1200} \] \[ \text{Tax}_{mo} = \frac{P \cdot t}{1200}, \qquad \text{Ins}_{mo} = \frac{I}{12} \] \[ \text{Payment} = \text{P\&I} + \text{MIP}_{mo} + \text{Tax}_{mo} + \text{Ins}_{mo} + \text{HOA} \]

Where:

$P$ — home price ($)
$d$ — down payment (% of price)
$L$ — base loan amount ($)
$U$ — upfront MIP, 1.75% of the base loan, typically financed into the loan ($)
$T$ — total loan amount including the financed upfront MIP ($)
$r$ — annual interest rate (%)
$i$ — monthly interest rate as a decimal
$n$ — loan term in years (15 or 30)
$a$ — annual MIP rate (%), which depends on the loan term and loan-to-value ratio
$t$ — annual property tax rate (% of home price)
$I$ — annual homeowner's insurance premium ($)
$\text{HOA}$ — monthly homeowners association dues ($)

The formulas compute the standard amortizing payment on the full loan amount (base loan plus the financed upfront MIP) and add the monthly mortgage insurance, property tax, insurance, and HOA dues to arrive at the total monthly payment.

FHA Loan – Calculation Example

Example: you buy a $400,000 home with the FHA minimum 3.5% down payment (credit score 580+), a 6.5% interest rate on a 30-year term, 1.1% annual property tax, $1,500 per year homeowner's insurance, and no HOA dues.

Base loan amount:
\[ L = 400{,}000 \times (1 - 0.035) = 386{,}000 \]

Upfront MIP (1.75%, financed) and total loan:
\[ U = 386{,}000 \times 0.0175 = 6{,}755, \qquad T = 386{,}000 + 6{,}755 = 392{,}755 \]

Principal and interest at 6.5% over 30 years:
\[ \text{P\&I} = \frac{392{,}755 \times 0.0054167}{1 - (1.0054167)^{-360}} \approx 2{,}480.53 \]

Monthly MIP (LTV is 96.5%, so the annual rate is 0.55% for a 30-year loan):
\[ \text{MIP}_{mo} = \frac{392{,}755 \times 0.55}{1200} \approx 179.95 \]

Property tax: $ 400{,}000 \times 0.011 / 12 = 366.67 $. Insurance: $ 1{,}500 / 12 = 125.00 $.

Result: total monthly payment $ \approx 2{,}480.53 + 179.95 + 366.67 + 125.00 = \$3{,}152.15 $. Because the down payment is under 10%, monthly MIP lasts the life of the loan; total MIP paid over 30 years is roughly $ 6{,}755 + 179.95 \times 360 \approx \$71{,}536 $.

How to use the calculator

Enter your Home price — the purchase price of the property. Make sure it is within the FHA loan limit for your county.
Enter your Down payment as a percentage. FHA requires at least 3.5% with a credit score of 580 or higher, or 10% with a score of 500–579.
Select your Credit score range — this determines the minimum down payment the calculator will accept.
Enter the quoted Interest rate in percent (for example, 6.5).
Choose a Loan term: 15 or 30 years. The term also affects the annual MIP rate.
Enter your Property tax rate as a percentage of the home price per year, your annual Homeowner's insurance premium in dollars, and any monthly HOA dues.
Review the FHA Payment Breakdown: base loan amount, total loan with the financed upfront MIP, monthly P&I, monthly MIP, taxes, insurance, HOA, and the total monthly payment, plus a table showing total MIP paid over the loan.

What is an FHA loan and what is MIP?

An FHA loan is a mortgage insured by the Federal Housing Administration, a part of the U.S. Department of Housing and Urban Development (HUD). Because the government guarantees part of the loan, lenders can approve borrowers with lower credit scores and smaller down payments than conventional loans typically allow. FHA loans are popular with first-time buyers for exactly this reason.

In exchange for that insurance, borrowers pay a Mortgage Insurance Premium (MIP), which has two parts. The upfront MIP is 1.75% of the base loan amount and is usually financed into the loan rather than paid in cash — this is why the calculator adds it to your balance before computing the monthly payment. The annual MIP is charged monthly, at a rate set by HUD based on your loan term and loan-to-value (LTV) ratio.

How long you pay the annual MIP depends on your down payment. With less than 10% down, monthly MIP lasts for the life of the loan — it never drops off unless you refinance. With 10% or more down, it lasts 11 years. This is why the calculator reports total MIP paid: for a small down payment, MIP can add up to tens of thousands of dollars over the life of the loan, so it deserves a place in your budget alongside the interest rate.

When reading the results, remember that the total monthly payment is what a lender will weigh against your income. A common guideline is that total housing costs should stay below about 31% of gross monthly income for an FHA loan. To check whether your full payment fits your finances, compare it with your other debts using our debt-to-income ratio calculator.

Assumptions and limitations

MIP rates: the calculator uses the current HUD annual MIP schedule — 0.55% (LTV over 95%) or 0.50% (LTV of 95% or less) for 30-year loans; 0.40% (LTV over 90%) or 0.15% (LTV of 90% or less) for 15-year loans — plus a 1.75% upfront premium. HUD adjusts these rates periodically, so verify them before relying on the numbers.
Financed upfront MIP: the calculation assumes you roll the upfront MIP into the loan rather than paying it in cash.
Fixed rate: the payment assumes a fixed-rate, fully amortizing loan. FHA adjustable-rate mortgages will have payments that change over time.
Escrowed taxes and insurance: FHA loans require property tax and homeowner's insurance to be escrowed, so they are included in the monthly payment. Estimates for taxes and insurance vary by location — replace the default values with figures for your specific property.
Loan limits: FHA loan limits vary by county and change annually. If your home price exceeds the limit for your area, an FHA loan is not an option at that price.
Not included: closing costs, discount points, and any lender or third-party fees are not part of the estimate.

Practical tips

Raising a 3.5% down payment to 10% or more not only lowers your balance: it also caps monthly MIP at 11 years instead of the full term, which can save a substantial amount on a 30-year loan.
Once you can put 20% down, compare FHA against a conventional loan — conventional loans drop private mortgage insurance entirely once you reach 20% equity, while FHA MIP (for small down payments) never goes away without a refinance.
An FHA loan is just one path to ownership. Our rent vs. buy calculator can help you weigh whether buying now makes sense overall.
After closing, paying a little extra each month shortens the loan and cuts total interest — see how much with the mortgage payoff calculator.

Frequently Asked Questions

How do I calculate an FHA payment by hand without the calculator?

Start with the base loan: home price minus your down payment. Add 1.75% of that amount for the upfront MIP, since most borrowers finance it. Then compute the amortizing payment with the standard formula $ M = \frac{T \cdot i}{1-(1+i)^{-12n}} $, where $i$ is the annual rate divided by 1200 and $n$ is the term in years. Finally, add one month of annual MIP (total loan × MIP rate ÷ 12), property tax, insurance, and HOA dues. Verify your math against the calculator result.

Is my monthly payment estimate too high? What share of income is acceptable?

FHA lenders generally want your total housing payment (P&I, MIP, taxes, insurance, HOA) to stay around 31% of your gross monthly income, though approval is possible up to about 43–50% with compensating factors. If your estimate exceeds 31%, consider a cheaper home, a larger down payment, or a 15-year term. This is an estimate only — a lender's official underwriting determines what you actually qualify for.

What is the difference between FHA MIP and conventional PMI?

MIP is the insurance premium on government-backed FHA loans; PMI is private mortgage insurance on conventional loans. The key differences: MIP includes a 1.75% upfront charge plus an annual premium, while PMI has no upfront fee. PMI automatically cancels once you reach 20–22% equity, but FHA MIP with less than 10% down lasts the entire loan term unless you refinance. PMI rates also depend more heavily on your credit score.

Can I ever get rid of FHA mortgage insurance premiums?

It depends on your down payment. With 10% or more down, the annual MIP cancels automatically after 11 years. With less than 10% down, monthly MIP never goes away on that loan — your only exit is refinancing into a conventional loan once you have 20% equity or enough appreciation. The upfront MIP is already rolled into your balance, so it can only be shed by paying the loan down or refinancing.

Why can't I enter a down payment under 3.5% (or under 10% with a lower credit score)?

FHA rules set the floor. Borrowers with a credit score of 580 or higher must put down at least 3.5%. Those with scores of 500–579 must put down at least 10%, and scores below 500 generally do not qualify for FHA financing at all. Lenders can also impose stricter overlays than the FHA minimums, so check your specific lender's requirements.

What are the current FHA loan limits, and what happens if the home costs more?

FHA loan limits are set per county each year and are based on the median home price in that area — low-cost counties have a floor, high-cost areas have a much higher ceiling. Your base loan amount (home price minus down payment) must fall within your county's limit. If the home price exceeds the limit, you cannot use an FHA appraisal loan at that price; look up the current limit for your county on the HUD website before house hunting.

What common mistakes do people make when estimating an FHA payment?

The biggest is forgetting the upfront MIP gets financed, which raises both your balance and your P&I payment — not just by 1.75% of cash. Others include using the base loan instead of the total loan for the annual MIP calculation, ignoring escrowed taxes and insurance that lenders require, assuming MIP drops off after 20% equity like PMI does, and overlooking county loan limits. Always plug in your actual tax and insurance quotes rather than national averages.