🏠 FHA Loan Calculator
Federal Housing Administration Loan
How to Use This Calculator
Enter Home Price
Input the purchase price of the home you're considering. Make sure this is within FHA loan limits for your area.
Select Down Payment
Choose your down payment percentage. FHA loans require a minimum of 3.5% with a credit score of 580+, or 10% with a credit score of 500-579.
Enter Interest Rate and Term
Input the interest rate and select your loan term (15 or 30 years). FHA loans typically have competitive rates.
Review FHA Payment Details
See your total monthly payment including principal, interest, MIP (Mortgage Insurance Premium), property taxes, and insurance.
Formula
Monthly Payment (P&I) = P × [r(1+r)^n] / [(1+r)^n - 1]
Where: P = Loan Amount + Upfront MIP, r = Monthly Rate, n = Number of Payments
Upfront MIP = Loan Amount × 1.75%
Monthly MIP = (Loan Amount × 0.55%) / 12
Example 1: $300,000 Home with 3.5% Down
Home Price: $300,000
Down Payment (3.5%): $10,500
Loan Amount: $289,500
Upfront MIP (1.75%): $5,066.25
Loan with MIP: $294,566.25
Monthly P&I (6.5%, 30 years): ~$1,862
Monthly MIP (0.55%): ~$132.69
Total Monthly Payment (PITI + MIP): ~$2,200+
Example 2: $250,000 Home with 10% Down
Home Price: $250,000
Down Payment (10%): $25,000
Loan Amount: $225,000
Upfront MIP: $3,937.50
Monthly P&I (6.0%, 30 years): ~$1,349
Monthly MIP: ~$103.13
About FHA Loan Calculator
The FHA Loan Calculator is an essential tool for homebuyers considering Federal Housing Administration (FHA) loans. FHA loans are government-backed mortgages designed to help first-time homebuyers and those with lower credit scores or limited down payment funds achieve homeownership. This calculator helps you understand the true cost of an FHA loan, including the unique Mortgage Insurance Premium (MIP) requirements that differ from conventional loans.
FHA loans are popular because they offer more flexible qualification requirements than conventional loans, including lower credit score requirements (as low as 500 with 10% down, or 580 with 3.5% down), lower down payment requirements (minimum 3.5%), and more lenient debt-to-income ratios. However, FHA loans require both an upfront MIP (1.75% of the loan amount) and an annual MIP (typically 0.55% for most loans) that's paid monthly, which adds to the overall cost of the loan.
This calculator provides a comprehensive breakdown of FHA loan costs, including the upfront MIP that can be rolled into the loan, monthly principal and interest payments, ongoing monthly MIP payments, and estimated property taxes and insurance. Understanding these costs is crucial for budgeting and comparing FHA loans to conventional loan options. The calculator helps you make informed decisions about whether an FHA loan is the right choice for your financial situation and home buying goals.
When to Use This Calculator
- Home Purchase Planning: Calculate FHA loan payments before house hunting
- Affordability Analysis: Determine if you can afford a home with an FHA loan
- Loan Comparison: Compare FHA loan costs to conventional loan options
- Budget Planning: Understand total monthly payment including MIP
- Down Payment Planning: Calculate minimum down payment requirements
- Refinance Evaluation: Evaluate FHA streamline refinance options
Why Use Our Calculator?
- ✅ Comprehensive FHA Calculations: Includes upfront and monthly MIP
- ✅ Accurate Payment Breakdown: Shows PITI + MIP components
- ✅ Easy to Use: Simple interface for quick calculations
- ✅ Free Tool: No registration or fees required
- ✅ Educational: Explains FHA loan benefits and drawbacks
- ✅ Mobile Friendly: Calculate on any device
Understanding FHA Loans and MIP
FHA loans are insured by the Federal Housing Administration, which allows lenders to offer more favorable terms to borrowers who might not qualify for conventional loans. The trade-off is that FHA loans require Mortgage Insurance Premium (MIP) to protect the lender in case of default. Unlike Private Mortgage Insurance (PMI) on conventional loans, which can be removed once you reach 20% equity, FHA MIP has different rules depending on your down payment and loan term.
For FHA loans with less than 10% down payment, MIP typically lasts for the life of the loan. For loans with 10% or more down payment, MIP can be removed after 11 years if certain conditions are met. The upfront MIP of 1.75% can be paid at closing or rolled into the loan amount, while the annual MIP (typically 0.55% for most loans) is divided into 12 monthly payments. Understanding these costs is essential for evaluating whether an FHA loan is cost-effective compared to other financing options.
Real-World Applications
First-Time Homebuyer: A first-time buyer with a credit score of 620 and limited savings is considering a $280,000 home. With an FHA loan, they can put down just 3.5% ($9,800) instead of the 20% ($56,000) required for a conventional loan without PMI. The FHA loan makes homeownership accessible, though they'll pay MIP for the life of the loan.
Credit Score Recovery: A buyer with a credit score of 550 is rebuilding credit but wants to buy a home now. FHA loans allow them to qualify with 10% down, while conventional loans might not be available. The higher MIP cost is worth it to achieve homeownership and build equity.
Refinancing: A homeowner with an existing FHA loan can use an FHA streamline refinance to lower their interest rate with minimal documentation. This calculator helps them understand the new payment structure and whether refinancing makes financial sense.
Important Considerations
- FHA loans have maximum loan limits that vary by county and property type
- Properties must meet FHA standards and pass FHA appraisal requirements
- MIP cannot be removed on loans with less than 10% down (unless refinancing to conventional)
- FHA loans require the property to be your primary residence
- Compare FHA loan costs to conventional loans, especially if you have 20% down
- Consider future refinancing to conventional loan to remove MIP once you have 20% equity
Frequently Asked Questions
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration, designed to help borrowers with lower credit scores and smaller down payments qualify for home loans. FHA loans offer more flexible qualification requirements than conventional loans but require Mortgage Insurance Premium (MIP).
What is the minimum down payment for an FHA loan?
The minimum down payment for an FHA loan is 3.5% if your credit score is 580 or higher. If your credit score is between 500-579, you'll need at least 10% down. These are significantly lower than the typical 20% required for conventional loans without PMI.
What is FHA MIP and how much does it cost?
FHA MIP (Mortgage Insurance Premium) includes an upfront MIP of 1.75% of the loan amount (can be rolled into the loan) and an annual MIP of typically 0.55% (paid monthly). For loans with less than 10% down, MIP typically lasts for the life of the loan. For loans with 10%+ down, MIP can be removed after 11 years.
Can I remove FHA MIP?
For FHA loans with less than 10% down payment, MIP typically cannot be removed unless you refinance to a conventional loan. For loans with 10% or more down, MIP can be removed after 11 years if you've made timely payments and meet other conditions. The most common way to remove MIP is to refinance to a conventional loan once you have 20% equity.
What credit score do I need for an FHA loan?
FHA loans accept credit scores as low as 500, but with different down payment requirements: 580+ allows 3.5% down, while 500-579 requires 10% down. However, individual lenders may have higher minimum credit score requirements, so check with specific lenders.
Are FHA loans only for first-time homebuyers?
No, FHA loans are available to all qualified borrowers, not just first-time homebuyers. However, the property must be your primary residence. FHA loans are popular among first-time buyers because of the low down payment requirements, but repeat buyers can also use FHA loans.