FHA Loan Calculator

How FHA Mortgage Insurance Works

FHA loans require two forms of mortgage insurance, both included in this calculator. The Upfront Mortgage Insurance Premium (UFMIP) is a one-time charge — typically 1.75% of the base loan amount — that most borrowers roll into the loan balance rather than pay in cash, so it's added to your loan amount here and financed over the full term. The annual Mortgage Insurance Premium (MIP) is paid monthly for the life of the loan in most cases when the down payment is below 10%, calculated here as a flat annual rate applied to the loan balance at closing.

Why FHA Loans Allow a 3.5% Down Payment

FHA loans are insured by the Federal Housing Administration, which lets lenders accept down payments as low as 3.5% (with a credit score of 580 or higher) instead of the 10-20% often expected on conventional loans. That accessibility comes at the cost of mandatory MIP, which — unlike conventional PMI — usually cannot be cancelled once you reach 20% equity on 30-year loans with a low down payment; you'd typically need to refinance into a conventional loan to remove it. Compare the numbers with a conventional option using the mortgage calculator.

Check Whether You Can Really Afford the Payment

Because MIP adds a permanent cost on top of principal, interest, taxes, and insurance, it's easy to underestimate your true monthly obligation. Before committing, run your income and debts through the house affordability calculator or the debt ratio calculator to confirm the payment fits comfortably within FHA's debt-to-income guidelines.