Estimate your monthly FHA mortgage payment with upfront and annual mortgage insurance, taxes, insurance and HOA fees. See your full amortization schedule and what extra payments could save.
Check how much house you can afford →+ More Options
Estimates only. Not a loan offer or approval. MIP is calculated on the outstanding balance as a simplified estimate.
What Is an FHA Loan?
An FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD. Because the government insures the lender against borrower default, lenders accept lower credit scores and smaller down payments than many conventional programs. FHA loans are for primary residences and are popular with first-time buyers.
Mortgage Insurance Premium (MIP)
Every FHA loan carries two premiums. The upfront MIP is 1.75% of the base loan and can be financed. The annual MIP is billed monthly, and the rate depends on the term, the loan amount and your loan-to-value (LTV) ratio. The rate tables are explained below.
FHA Annual MIP Rates
The annual MIP is a percentage of your outstanding loan balance, charged each year and collected in twelve monthly installments with your payment. Three factors set the rate: your loan term, the base loan amount (before any financed upfront MIP) and your loan-to-value (LTV) ratio. Standard rates for new purchase loans:
Term over 15 years
| Base loan amount | LTV 90% or less | LTV 90.01–95% | LTV over 95% |
|---|---|---|---|
| Up to $726,200 | 0.50% | 0.50% | 0.55% |
| Over $726,200 | 0.70% | 0.70% | 0.75% |
Term of 15 years or less
| Base loan amount | LTV 78% or less | LTV 78.01–90% | LTV over 90% |
|---|---|---|---|
| Up to $726,200 | 0.15% | 0.15% | 0.40% |
| Over $726,200 | 0.15% | 0.40% | 0.65% |
How long does annual MIP last?
- LTV above 90% (less than 10% down): MIP is paid for the life of the loan.
- LTV 90% or less (10% or more down): MIP is paid for 11 years.
Rates and limits can change, so confirm the current schedule on HUD.gov.
Loan Term: 15 Years or Less
Choosing a 15-year (or shorter) FHA loan changes the math in three ways:
- Much lower MIP: the annual rate can be as low as 0.15%, versus 0.50%–0.55% on most 30-year loans. With 10% or more down, it also ends after 11 years.
- Far less total interest: you pay the balance off in half the time, and shorter terms often carry slightly lower interest rates.
- Higher monthly payment: principal is repaid faster, so the payment is noticeably larger and your debt-to-income ratio rises.
Try it above: run the calculator at 30 years, then switch the term to 15 and compare the monthly payment, total interest and total MIP paid. A short term suits buyers with strong, stable income who want to build equity quickly.
FHA Loan Requirements
- Credit and down payment: a 580+ score generally allows 3.5% down; scores of 500–579 generally require 10% down. Many lenders set higher minimums.
- Debt-to-income: the standard guideline is 31% for housing and 43% for total debt, with exceptions for strong compensating factors.
- Occupancy: the home must be your primary residence, and the property must meet FHA appraisal and safety standards.
- Loan limits: maximums vary by county and are updated annually, so check your area’s limit.
FHA Home Affordability
FHA lenders typically look at two ratios: housing costs (principal, interest, MIP, taxes, insurance and HOA) at about 31% of gross monthly income, and total monthly debts at about 43%. Strong credit, savings or steady income can sometimes justify higher ratios.
To turn those limits into a price range, use our House Affordability Calculator with the FHA (31/43) setting, then enter that price here to see the exact FHA payment with MIP.
Pros and Cons of FHA Loans
Pros
- Low down payment (3.5%)
- More flexible credit standards
- Higher DTI limits than most conventional loans
- Gift funds and seller concessions are allowed within limits
- Generally no prepayment penalty
Cons
- Upfront and annual mortgage insurance raise total cost
- Annual MIP may last the life of the loan
- County loan limits cap the price you can finance
- Primary residence only; property must pass FHA appraisal
- Refinancing to a conventional loan is often needed to drop MIP
Closing Costs
Expect origination, appraisal, credit report, title insurance and recording fees, plus prepaid taxes and insurance. Buyers often budget a few percent of the price, and sellers may contribute within FHA limits. The upfront MIP is either paid at closing or financed into the loan.
Prepayment
FHA loans generally carry no prepayment penalty, so you can pay extra principal monthly, yearly or in one lump sum. Doing so shortens the loan and cuts total interest. Use the More Options fields above to see the exact interest and time saved.
- Tell your servicer to apply extra funds to principal, not to future payments.
- Older FHA loans (closed before 2015) may charge interest through the end of the month when paid off mid-month. Ask your servicer.
- Extra payments do not cancel MIP early. If your original LTV was above 90%, MIP stays for the life of the loan, so the usual way to drop it is to refinance into a conventional loan once you have enough equity.
FHA 203(k) Loans
A 203(k) loan rolls the purchase price (or your current mortgage) and the cost of renovations into one FHA mortgage, which suits fixer-uppers. Funds for the work are held in escrow and released in stages as repairs are completed.
- Limited 203(k): for smaller, non-structural projects such as paint, flooring, appliances or minor repairs. HUD caps the renovation budget (currently around $75,000, confirm with your lender).
- Standard 203(k): for major or structural work such as room additions or foundation repairs. It usually requires a HUD-approved consultant and detailed plans.
- Expect: extra fees (consultant, inspection and supplemental origination), a contingency reserve, and a slightly longer closing. Luxury items such as a pool are generally not eligible.
Frequently Asked Questions
How much is FHA mortgage insurance per month?
Monthly MIP equals your loan balance times the annual rate, divided by 12. On a $386,000 base loan at 0.55%, that is about $177 a month at the start. A 1.75% upfront premium is charged as well and is usually financed.
Does FHA mortgage insurance ever go away?
With less than 10% down, annual MIP lasts for the life of the loan. With 10% or more down, it ends after 11 years. Many borrowers remove it sooner by refinancing into a conventional loan once they have roughly 20% equity and qualifying credit.
What credit score and down payment do I need for an FHA loan?
FHA guidelines generally allow 3.5% down with a 580 score and 10% down for scores of 500–579. Lenders often add their own, higher minimums, so shop several FHA-approved lenders.
How much house can I afford with an FHA loan?
FHA uses roughly 31% of gross income for housing and 43% for total debt. On $90,000 of income that is about $2,325 for housing. Use our House Affordability Calculator to convert your ratios into a price range.
Is an FHA loan cheaper than a conventional loan?
It depends on your credit and down payment. With a high score and 5–20% down, conventional PMI is often cheaper and can be cancelled. With a lower score or small down payment, FHA can offer a better rate and easier approval despite MIP. Compare the full monthly payment on both.
Is a 15-year FHA loan worth it?
If you can handle the higher payment, yes. Annual MIP can be as low as 0.15%, total interest drops sharply, and with 10% or more down MIP ends after 11 years. Compare 15-year and 30-year results in the calculator above.
Can I pay off my FHA loan early without a penalty?
FHA loans generally have no prepayment penalty. Specify that extra payments go toward principal and, on pre-2015 loans, ask about interest owed through month-end. Paying extra does not stop MIP, but it does cut interest and shorten the term.
What is an FHA 203(k) loan and how does it work?
It is a single FHA mortgage that finances both the home and its renovation. Limited 203(k) loans cover smaller, non-structural work, while Standard 203(k) loans cover major repairs with a HUD consultant. Repair funds go into escrow and are released as work is finished.
Disclaimer: For education only; not financial, legal or tax advice. Speak with an FHA-approved lender for an official Loan Estimate.