How to Use This FHA Loan Calculator
Getting an accurate picture of your potential mortgage payment is a critical step in the home-buying process. Our calculator simplifies this by breaking down every component of an FHA loan. Follow these simple steps:
- Home Price: Enter the purchase price of the home.
- Down Payment: Input the amount you'll pay upfront. FHA's minimum is 3.5% of the home price.
- Loan Term: Select the duration of your loan, typically 30 or 15 years.
- Interest Rate: Provide the estimated annual interest rate (APR) from your lender.
- Annual Costs: Add your yearly property tax and homeowner's insurance estimates.
- HOA Fees: If applicable, enter the monthly Homeowners Association fee.
- Calculate: Click the button to see your detailed monthly payment estimate.
Understanding Your FHA Loan Payment Breakdown
An FHA loan, insured by the Federal Housing Administration, is a popular path to homeownership, especially for those with smaller down payments or less-than-perfect credit. However, it has a unique cost structure. Our calculator provides a clear estimate of your total monthly payment, which consists of PITI + MIP.
The Core Components of Your FHA Payment
Your total monthly mortgage payment is more than just repaying the loan. Here’s what’s included:
- Principal & Interest (P&I): This is the core of your payment. Principal reduces your loan balance, while interest is the cost of borrowing.
- Taxes: This is one-twelfth of your annual property tax bill. Lenders collect this each month and hold it in an escrow account to pay the tax bill on your behalf.
- Insurance: This is the monthly portion of your annual homeowner's insurance premium, also typically held in escrow.
- FHA Mortgage Insurance Premium (MIP): This is mandatory for all FHA loans. It protects the lender if you default. It includes a large upfront premium (UFMIP) that's usually financed into the loan, and an annual premium that is paid in monthly installments for a specific duration (often the life of the loan).
- HOA Fees: If you buy a condo, townhouse, or home in certain planned communities, you may have a monthly Homeowners Association fee.
An FHA loan is just one path to homeownership. You can compare it with other scenarios using our standard Mortgage Calculator. If you're wondering how much house you can afford in the first place, our House Affordability Calculator is a great place to start. And if you already have an FHA loan, you might be interested in seeing potential savings with our Refinance Calculator.
Frequently Asked Questions About FHA Loans
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). It's a popular option, especially for first-time homebuyers, because it allows for a low down payment (as little as 3.5%) and is accessible to borrowers with lower credit scores compared to conventional loans.
What is FHA Mortgage Insurance Premium (MIP)?
FHA loans require two types of Mortgage Insurance Premium (MIP). The first is an Upfront MIP (UFMIP), currently 1.75% of the base loan amount, which can be paid at closing or financed into the loan. The second is an Annual MIP, which is paid monthly as part of your total mortgage payment. This insurance protects the lender if a borrower defaults on the loan.
How long do I have to pay FHA MIP?
The duration of your monthly FHA MIP payments depends on your initial loan-to-value (LTV) ratio. If your down payment is less than 10% (LTV > 90%), you will pay MIP for the entire life of the loan. If your down payment is 10% or more (LTV <= 90%), you will pay MIP for the first 11 years.
What are the FHA loan requirements for 2025?
Key FHA loan requirements for 2025 generally include: a minimum credit score of 580 for a 3.5% down payment (or 500-579 for a 10% down payment), a debt-to-income (DTI) ratio typically below 43%, verifiable income and employment history, and the property must meet FHA minimum standards and be used as your primary residence.
Is it better to get an FHA or conventional loan?
The better choice depends on your financial profile. FHA loans are often better if you have a lower credit score and a smaller down payment. Conventional loans may be better if you have a strong credit score (typically 620+) and a down payment of 20% or more, as you can avoid mortgage insurance (PMI) altogether. For down payments under 20%, conventional PMI can often be canceled later, while FHA MIP is often for the life of the loan.