FHA loans come with mortgage insurance — and it adds up. Factor in both upfront and annual MIP to see your true monthly payment and total loan cost upfront.
M = P × [ i(1 + i)^n ] / [ (1 + i)^n - 1 ] + (Loan × 0.55% / 12)FHA payment uses the standard amortization formula where P includes the 1.75% upfront MIP financed into the loan, plus an annual mortgage insurance premium of 0.55% of the base loan amount paid monthly.
| Symbol | Meaning |
|---|---|
| M | Monthly payment (P&I + MIP) |
| P | Loan amount including 1.75% upfront MIP |
| i | Monthly interest rate (annual ÷ 12) |
| n | Total payments (years × 12) |
Our calculations are based on established financial and scientific formulas. The following sources inform the default values and methodology used in this calculator:
FHA loans require two types of mortgage insurance premiums. This table breaks down the actual costs for different home price scenarios.
| Home Price | 3.5% Down | Loan Amount | Upfront MIP (1.75%) | Annual MIP/Month | Total Year 1 MIP Cost |
|---|---|---|---|---|---|
| $200,000 | $7,000 | $193,000 | $3,378 | $88/mo | $4,434 |
| $250,000 | $8,750 | $241,250 | $4,222 | $111/mo | $5,551 |
| $300,000 | $10,500 | $289,500 | $5,066 | $133/mo | $6,662 |
| $350,000 | $12,250 | $337,750 | $5,911 | $155/mo | $7,771 |
| $400,000 | $14,000 | $386,000 | $6,755 | $177/mo | $8,879 |
| $500,000 | $17,500 | $482,500 | $8,444 | $221/mo | $11,096 |
The upfront MIP (1.75%) is typically financed into the loan, so you do not pay it out of pocket at closing — but it increases your loan balance and total interest paid over time. The annual MIP (0.55% for most 30-year loans) is paid monthly and, for loans with less than 10% down, lasts for the life of the loan. This is why many FHA borrowers eventually refinance into conventional loans to eliminate MIP once they have 20% equity.
FHA loans are backed by the Federal Housing Administration and are designed for borrowers with lower credit scores or smaller down payments. Conventional loans are not government-backed and typically require higher credit scores but offer more flexibility and lower long-term costs. Here is how they compare.
| Feature | FHA Loan | Conventional Loan |
|---|---|---|
| Minimum Down Payment | 3.5% | 3% (some programs), 5% typical |
| Minimum Credit Score | 500 (10% down) / 580 (3.5% down) | 620-660 (varies by lender) |
| Mortgage Insurance | Upfront MIP (1.75%) + Annual MIP (0.55% for life if <10% down) | PMI (0.3-1.5%) — cancellable at 20% equity |
| Interest Rate | Typically 0.25-0.5% lower than conventional | Slightly higher, but PMI is cheaper and cancellable |
| Loan Limits | $498,257 (low-cost) / $1,149,825 (high-cost) | $766,550 (conforming) / higher for jumbo |
| Property Standards | Stricter (FHA appraisal required) | Standard appraisal, fewer repair requirements |
| Debt-to-Income Ratio | Up to 50% (with compensating factors) | Usually max 43-45% |
| Refinance Options | FHA Streamline (no appraisal, minimal docs) | Rate-and-term, cash-out, HELOC |
FHA loans are best for borrowers with credit scores below 620 or down payments under 5%. Once you have 20% equity, refinancing to a conventional loan eliminates FHA mortgage insurance — saving hundreds per month. For borrowers with good credit (680+) and a 5%+ down payment, a conventional loan is almost always cheaper in the long run because PMI is cancellable and total costs are lower. Use this FHA loan calculator to compare your monthly payment under both options.
Generally no — FHA loans require the property to be your primary residence, occupied within 60 days of closing. The exceptions are narrow: a job relocation beyond commuting distance or a growing family can justify keeping a previous FHA home while buying another. What FHA does allow is a multi-unit twist: buy a 2–4 unit property, live in one unit, and rent the others — projected rental income can even help you qualify, which is how many first-time buyers become landlords.
The FHA insures loans down to a 500 score, but with a catch: 580+ qualifies for the 3.5% minimum down payment, while 500–579 requires 10% down. Below 500, FHA insurance isn't available at all. In practice many lenders overlay their own minimums (often 600–620), so your FHA eligibility and what a specific lender will approve are two different numbers.
An FHA appraisal does double duty: it establishes value and enforces minimum property requirements (MPRs) — working heat, a sound roof, no peeling paint in pre-1978 homes, safe electrical. It is not a full inspection, though: the appraiser won't test appliances or crawl the attic. Smart buyers still hire a home inspector, because MPRs protect the lender's collateral, not your maintenance budget. If the appraisal flags MPR failures, they usually must be repaired before the loan closes.
Yes — FHA limits track county home prices and reset annually. In 2025 the floor for a single-family home is $524,225 in low-cost counties and the ceiling is $1,209,750 in the most expensive ones; most counties sit between. Loans above the local limit aren't FHA-insurable, which is one reason high-cost markets skew conventional.
Zero down, but the funding fee varies. Calculate your VA loan payment with the correct funding fee rate based on your down payment and service category. Built for veterans.
Is refinancing worth it after closing costs? Compare your old vs new payment, find the break-even point, and see how much you'd actually save (or lose) over the life of the loan.
40% off plus an extra 20% — what's the real deal? Calculate the final price after one or two stacked discounts. Know exactly what you're saving before you check out.
That $20 item isn't $20 after Etsy's fees. See the full breakdown — listing, transaction, payment processing — and your true profit per sale. Know what you're actually earning.
Amazon fees can eat 30-50% of your sale price. Calculate your real FBA profit margin with referral fees, fulfillment costs, and storage. Find out if your product is actually worth selling.
Rates verified 2026-10-09 · Sourced from official seller fee schedules