FHA Loan Calculator
Determine your full FHA loan payment including both MIP charges and see how the lifetime cost compares to conventional financing at the same home price and down payment.
$
years
Enter your values above to see the results.
Tips & Notes
- ✓If your credit score reaches 620 and you have 5% saved, compare FHA against conventional — the lifetime MIP savings almost always favor conventional.
- ✓Putting 10% down on an FHA loan reduces MIP duration to 11 years instead of the life of the loan — worth stretching for if you can reach that threshold.
- ✓FHA allows seller concessions up to 6% of the purchase price toward buyer closing costs — negotiate this to preserve your cash for the down payment.
- ✓After building 20% equity through appreciation and payments, refinancing into conventional eliminates the permanent MIP and saves hundreds monthly.
- ✓FHA minimum is 580 credit score, but most lenders require 620 — check lender overlays, not just FHA guidelines, before assuming you qualify.
- ✓The upfront MIP of 1.75% is added to your loan balance — your actual financed amount is higher than home price minus down payment by this amount.
Common Mistakes
- ✗Assuming FHA is always the cheapest low-down-payment option — conventional PMI cancels at 20% equity while FHA MIP is permanent with under 10% down.
- ✗Forgetting the upfront MIP adds 1.75% to the loan balance — this increases both the amount financed and the monthly P&I payment from day one.
- ✗Not comparing the 30-year total cost including all MIP against a conventional loan with PMI — the difference is often $35,000-$50,000 in favor of conventional.
- ✗Overlooking FHA loan limits for your area — homes above the limit require conventional or jumbo financing regardless of your down payment size.
- ✗Assuming FHA rates are always lower than conventional — for borrowers with credit above 680, conventional rates are often equal or better.
- ✗Ignoring FHA appraisal requirements — FHA appraisers flag property condition issues that conventional appraisers overlook, which can kill deals on fixer-uppers.
FHA Loan Calculator Overview
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration. It allows buyers to purchase with as little as 3.5% down and qualifies at lower credit scores than conventional loans. The trade-off is mandatory mortgage insurance — both upfront and ongoing — that adds significantly to the total cost.
This calculator shows the complete FHA payment including both MIP charges so you can compare it honestly against conventional alternatives.
What each field means:
- Home Price — full purchase price of the property
- Down Payment — minimum 3.5% for credit scores 580+; 10% for scores 500-579
- Interest Rate — annual rate on the loan; FHA rates are often competitive with conventional
- Loan Term — typically 30 years; FHA also offers 15-year terms
What your results mean:
- Monthly Payment — P&I plus MIP plus taxes and insurance; the true all-in cost
- Loan Amount — base loan after down payment (before upfront MIP is added)
- Total Paid — all payments over the full term including all MIP
- Total Interest — interest portion only; excludes MIP costs
Example — $300,000 home, 3.5% down ($10,500), 6.75% rate:
Base loan: $289,500 Upfront MIP (1.75%): $5,066 — added to the loan Total financed: $294,566 Monthly P&I at 6.75%: $1,911 Annual MIP (0.55%): $1,620/yr = $135/month Total monthly P&I + MIP: $2,046 MIP continues for life of loan (cannot be cancelled with under 10% down) Total MIP paid over 30 years: approximately $48,600
EX: FHA vs conventional — $300,000 home at 6.75% FHA 3.5% down: $2,046/month (P&I + MIP) — MIP never cancels Conventional 5% down: $1,848 P&I + $142 PMI = $1,990/month — PMI cancels at year 8 Conventional 20% down: $1,558/month — no PMI ever FHA costs $56/month more than conventional 5% down AND carries permanent MIP. Over 30 years, the MIP difference alone is $35,000+ in favor of conventional.
FHA MIP rates by loan term and LTV:
| Loan Term | Down Payment | Annual MIP Rate |
|---|---|---|
| 30 years | Less than 10% | 0.55% (life of loan) |
| 30 years | 10% or more | 0.50% (11 years only) |
| 15 years | Less than 10% | 0.40% (life of loan) |
| 15 years | 10% or more | 0.15% (11 years only) |
FHA vs conventional — when each wins:
| Situation | FHA | Conventional |
|---|---|---|
| Credit score below 620 | Often the only option | May not qualify |
| Credit score 620-679 | Easier to qualify | No permanent MIP |
| Credit score 680+ | Higher lifetime cost | Better long-term value |
| Down payment under 10% | Permanent MIP | PMI cancels at 20% equity |
FHA loans function best as an entry point — a way to buy now with limited credit or savings, with the explicit plan to refinance into conventional once equity and credit improve. Borrowers who qualify for conventional at 5% down almost always save $30,000-$50,000 in lifetime insurance costs by choosing conventional over FHA, even if the monthly payment looks similar.
Frequently Asked Questions
The FHA technically allows 3.5% down with a 580 credit score and 10% down with scores between 500-579. However, most individual lenders apply stricter overlays requiring 620 or higher because they bear the risk if the loan defaults. If your score is below 620, shop lenders specifically focused on government loans. Each 20-point improvement in credit score before applying typically reduces your rate by 0.125-0.25%, which compounds significantly over a 30-year term.
With less than 10% down, FHA annual MIP continues for the entire loan term — 30 years in most cases. There is no automatic cancellation regardless of equity built. With 10% or more down, MIP cancels after 11 years. The only way to eliminate MIP with under 10% down before these timeframes is to refinance into a conventional loan once you reach 20% equity. Many buyers use FHA as a stepping stone to homeownership, then refinance when equity and credit qualify for conventional terms.
For buyers with credit below 620, FHA is often the only realistic option. For buyers with scores 620 and above, conventional is usually better long-term. FHA MIP is permanent with under 10% down, while conventional PMI cancels at 20% equity. On a $300,000 home, that difference can exceed $35,000 in lifetime insurance cost. However, if a conventional lender requires a significantly higher rate due to your credit profile, the rate premium may offset the MIP savings — compare both options over 5 and 10 years.
Yes — FHA allows financing for 2, 3, and 4-unit properties with 3.5% down, provided you live in one of the units. Rental income from other units can be used to qualify, typically at 75% of market rent. FHA loan limits are higher for multi-unit properties — in most areas, a 4-unit limit is roughly double the single-family limit. This approach lets buyers have tenants effectively subsidize housing costs while building equity in an income-producing asset.
FHA appraisers evaluate both market value and minimum property standards — the property must be safe, sound, and secure. Requirements include functioning utilities, no active leaks, intact roof with remaining life, no chipping or peeling lead paint in pre-1978 homes, and no health or safety hazards. Sellers of properties with deferred maintenance often prefer conventional buyers for this reason. Fixer-uppers typically need an FHA 203(k) renovation loan rather than a standard FHA purchase loan.
VA loans for veterans require no down payment, no ongoing mortgage insurance, and typically the best rates — but require military service. USDA loans also require no down payment and have low fees but are restricted to rural areas with income limits. FHA is the most broadly available: no geographic restriction, no military requirement, no income limit, but requires at least 3.5% down and carries permanent MIP. If you qualify for VA, it almost always beats FHA. USDA beats FHA in eligible rural areas. FHA serves urban buyers who do not meet VA or USDA criteria.