FHA Loan Calculator & FHA Mortgage Payment Calculator

About This FHA Loan Calculator & FHA Mortgage Payment Calculator

This free FHA loan calculator helps you estimate your monthly FHA mortgage payment, including the unique Mortgage Insurance Premium (MIP) that comes with all FHA loans. Whether you're a first-time homebuyer with limited savings or you're looking to refinance into an FHA loan, understanding the true monthly cost upfront helps you budget confidently and avoid surprises at closing.

Simply enter your home purchase price, down payment amount, interest rate, and loan term. We'll automatically calculate the upfront MIP (which can be rolled into your loan), the ongoing monthly MIP, and your total monthly payment including property taxes and homeowners insurance.

What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA), a government agency within the U.S. Department of Housing and Urban Development (HUD). Because the FHA guarantees the loan against default, lenders are willing to offer more flexible qualification requirements than conventional loans. This makes FHA loans especially popular with first-time homebuyers who may have limited savings for a down payment or less-than-perfect credit.

The biggest advantages of FHA loans are the low down payment requirement (as little as 3.5% of the purchase price) and more lenient credit score minimums (as low as 580 for the 3.5% down payment option). However, FHA loans come with two types of mortgage insurance — an upfront premium and an annual premium — which increase your monthly payment compared to a conventional loan with 20% down.

How FHA Mortgage Insurance Premium (MIP) Works

All FHA loans require Mortgage Insurance Premiums (MIP), which protect the lender if you default on the loan. There are two types of MIP:

• Upfront MIP (UFMIP): 1.75% of the base loan amount. This is typically financed into the loan (added to your principal) rather than paid out of pocket at closing. You can also choose to pay it upfront in cash, but most borrowers roll it in.
• Annual MIP: A monthly premium added to your mortgage payment, based on your loan amount, loan term, and loan-to-value ratio (LTV). For most borrowers with a 30-year term and less than 5% down, the annual MIP rate is around 0.80% of the original loan amount per year.

Unlike private mortgage insurance (PMI) on conventional loans, FHA MIP can be difficult to cancel. For loans originated after June 3, 2013, if you put down less than 10%, you'll pay annual MIP for the entire life of the loan. If you put down 10% or more, MIP drops off after 11 years. This is an important factor to consider when deciding between an FHA loan and a conventional loan.

FHA Loan Requirements & Eligibility

To qualify for an FHA loan, you'll need to meet these minimum requirements:

• Credit score: 580 or higher for the 3.5% down payment option. Between 500-579, you'll need at least 10% down.
• Down payment: 3.5% of the purchase price (or appraised value, whichever is lower).
• Debt-to-Income (DTI) ratio: Generally, your total monthly debts (including the new mortgage) should not exceed 43% of your gross monthly income. Some borrowers with stronger compensating factors may qualify up to 50% DTI.
• Steady employment history: Typically, two years of consistent employment or verified income.
• Property requirements: The home must be your primary residence, and it must pass an FHA appraisal to meet minimum property standards.

FHA Loan Limits (2024-2025)

FHA loans have maximum loan limits that vary by county. For most of the U.S., the 2024 FHA loan limit for a single-family home is $498,257. In high-cost areas (like Los Angeles, San Francisco, New York City), the limit goes up to $1,149,825. These limits are adjusted annually based on home prices.

Common Uses for FHA Loans

• First-time homebuyers — The low 3.5% down payment requirement is the biggest draw for buyers who haven't saved up 20% for a conventional loan.
• Bad or limited credit borrowers — FHA loans are much more forgiving of past bankruptcies, foreclosures, or short sales than conventional loans.
• Debt consolidation cash-out refinance — You can refinance up to 80% of your home's value with an FHA cash-out refinance to consolidate high-interest debt.
• FHA 203(k) renovation loans — Finance both the home purchase and the cost of repairs/renovations into one loan. Perfect for fixer-uppers.
• Streamline refinance — If you already have an FHA loan, you can refinance into a lower rate with less paperwork and no appraisal required.

FHA vs. Conventional Loan: Which Is Better?

Whether an FHA loan or a conventional loan is better depends on your down payment, credit score, and how long you plan to stay in the home:

• Choose FHA if: You have less than 20% down, your credit score is below 680, or you need more flexible debt-to-income requirements. The upfront and annual MIP costs are offset by the easier qualification.
• Choose conventional if: You have 20% or more down (no PMI needed), your credit score is 720+ (you'll get a great rate), or you plan to stay in the home long-term and want to avoid lifetime MIP.

A common strategy is to start with an FHA loan (to get into a home with low down payment), then refinance into a conventional loan once you've built up 20% equity in the home. This lets you avoid the lifetime MIP requirement while still getting into the market early.

Frequently Asked Questions

How much down payment do I need for an FHA loan?

The minimum down payment for an FHA loan is 3.5% of the purchase price (or appraised value, whichever is lower), as long as your credit score is 580 or higher. If your credit score is between 500-579, you'll need to put at least 10% down. On a $350,000 home, that's just $12,250 down with the 3.5% option — significantly less than the 20% ($70,000) required to avoid PMI on a conventional loan.

How long do I pay MIP on an FHA loan?

For FHA loans originated after June 3, 2013, if you made a down payment of less than 10%, you'll pay annual MIP for the entire life of the loan. If you put down 10% or more, MIP drops off automatically after 11 years. This is a key difference from conventional PMI, which cancels automatically once you reach 20% equity.

Can I roll the upfront MIP into my loan?

Yes! The upfront MIP (1.75% of the loan amount) can be financed into your loan, meaning you don't have to pay it out of pocket at closing. For example, on a $350,000 home with 3.5% down, your base loan is about $337,750. The upfront MIP of $5,910 gets added to your loan, making your total loan amount $343,660. You'll pay interest on the MIP over the life of the loan, but it saves you from having to come up with extra cash at closing.

What credit score do I need for an FHA loan?

The minimum credit score for an FHA loan is 580 to qualify for the 3.5% down payment option. If your score is between 500-579, you can still get an FHA loan, but you'll need to put at least 10% down. Most lenders have their own minimum credit score requirements (often 620 or 640), even though the FHA minimum is lower. Check with multiple lenders to find one that works with your credit profile.

Can I use gift money for my FHA down payment?

Yes! FHA loans allow 100% of your down payment to come from gift funds from an approved source — a family member, employer, close friend, or charitable organization. This is a huge benefit for first-time homebuyers who are receiving down payment help from their parents. The gift just needs a signed gift letter confirming it's not a loan and doesn't need to be repaid.

Frequently Asked Questions (More Answers)

What's the maximum debt-to-income ratio for an FHA loan?

The standard DTI limit for FHA loans is 43%, meaning your total monthly debts (mortgage, car loans, student loans, credit cards) can't exceed 43% of your gross monthly income. However, borrowers with strong compensating factors — like a large down payment, excellent credit, or significant cash reserves — can qualify with DTI ratios up to 50%. Use this calculator to estimate your monthly payment, then compare it to your monthly income to see where you stand.

Can I get an FHA loan for a second home or investment property?

No. FHA loans are only for primary residences — the home you live in full-time. You cannot use an FHA loan to buy a vacation home or rental property. However, FHA loans do allow you to have up to 4 living units (like a duplex or fourplex) as long as you live in one of the units. This is a popular way to start building real estate wealth while living with a low-down-payment FHA loan.

How much are closing costs on an FHA loan?

FHA closing costs typically range from 2-5% of the purchase price, similar to conventional loans. They include origination fees, appraisal fees, title insurance, credit report fees, and recording fees. On a $350,000 home, expect to pay between $7,000-$17,500 in closing costs. Sellers can contribute up to 6% of the purchase price toward your closing costs, which is a great negotiating point. You can also ask the lender to give you a lender credit (higher interest rate in exchange for covering closing costs).

Is FHA MIP tax deductible?

Yes! For homeowners with an adjusted gross income (AGI) below $100,000 (or $50,000 if married filing separately), FHA mortgage insurance premiums are tax-deductible as qualified mortgage insurance premiums. This deduction has been extended multiple times by Congress, so check the latest tax laws. This can save you hundreds or thousands of dollars per year on your tax return.

Can I refinance out of an FHA loan to remove MIP?

Yes! This is a very common strategy. Many homebuyers start with an FHA loan to get into a house with low down payment, then refinance into a conventional loan once they've built up 20% equity. Once you have 20% equity in the home, you can refinance to a conventional loan and drop the mortgage insurance entirely. This saves you hundreds of dollars per month and removes the lifetime MIP burden.