FHA Monthly Payment Calculator

What goes into an FHA house payment

An FHA loan payment has five parts: principal, interest, the annual mortgage insurance premium, property tax and home insurance. The first two get bundled into one number, often written as P&I. The mortgage insurance line is the part that makes an FHA loan different from a conventional one.

Principal is the slice that pays down what you borrowed. Interest is the lender's charge, figured each month on whatever balance is left, so the early years are interest heavy and the later years shift toward principal. The annual mortgage insurance premium (MIP) is what you pay FHA to insure the loan, and it protects the lender if you stop paying. Property tax and hazard insurance are collected monthly into an escrow account, then paid by the servicer when the bills come due.

FHA sets the rules that drive each part. The minimum down payment is 3.5 percent with a credit score of 580 or higher. The upfront premium is 1.75 percent of the base loan, and most buyers roll it into the loan. The annual premium runs from 0.15 percent to 0.75 percent of the base loan each year, set by loan size, term and loan to value. HUD publishes those rates in the FHA Single Family Housing Policy Handbook 4000.1, and the current schedule has been in place since March 20, 2023.

The two premiums, and which one shows up monthly

The upfront premium is a one time charge of 1.75 percent of the base loan. On a $337,750 base loan that is 337,750 x 0.0175 = 5,910.63 dollars. You can pay it in cash at closing or finance it, and financing is the common choice because it keeps the cash needed at closing lower. If you finance it, the loan you repay becomes 337,750 + 5,910.63 = $343,660.63.

The annual premium is the one that lands in your monthly bill. Take the base loan, multiply by the annual rate, then divide by 12. At 0.55 percent on a $337,750 base loan: 337,750 x 0.0055 = 1,857.63 dollars for the year, and 1,857.63 / 12 = 154.80 dollars a month.

Two details trip people up. First, the premium is charged on the base loan, not on the bigger loan that includes the upfront premium. Second, the base loan is what sets the loan to value used for the rate tier. A $350,000 home with 3.5 percent down gives 337,750 / 350,000 = 96.5 percent, which sits above the 95 percent line and pulls in the 0.55 percent rate instead of 0.50 percent.

HUD figures the monthly amount on the average balance for the year, not the starting balance. In year one that average is close to the original loan, so the simple method above lands within a few dollars of the lender's number. In later years the balance is smaller, so the dollar amount of MIP drifts down while the rate stays the same.

A worked example on a $350,000 home

Take a $350,000 house, 3.5 percent down, a 6.5 percent rate, a 30 year term, property tax at 1.25 percent of value and $1,400 a year for insurance. Start with the down payment: 350,000 x 0.035 = 12,250 dollars. The base loan is 350,000 - 12,250 = 337,750 dollars.

The upfront premium is 337,750 x 0.0175 = 5,910.63 dollars, and financing it gives 337,750 + 5,910.63 = 343,660.63 dollars. The monthly principal and interest on that balance at 6.5 percent over 360 months is $2,172.17. Because the loan sits at 96.5 percent of the price, the annual premium rate is 0.55 percent, which is 337,750 x 0.0055 = 1,857.63 dollars a year, or 1,857.63 / 12 = 154.80 dollars a month.

Now add the escrow pieces. Property tax is 350,000 x 0.0125 = 4,375 dollars a year, or 4,375 / 12 = 364.58 dollars a month. Insurance is 1,400 / 12 = 116.67 dollars. Add all four lines: 2,172.17 + 154.80 + 364.58 + 116.67 = 2,808.22 dollars a month.

Over the full term the interest comes to $438,320.19, and the mortgage insurance adds up to $37,088.63 because the premium is charged on a balance that falls a little every month.

Annual MIP rates and how long they last

The annual rate is not one number. HUD sets it with a grid that reads across term, base loan amount and loan to value. The current grid comes from Mortgagee Letter 2023-05, which took effect for case numbers assigned on or after March 20, 2023, and it still governs loans insured in 2026. The loan size break sits at the conforming loan limit, which is $832,750 for a one unit property in 2026.

Duration follows one line: a loan at 90 percent loan to value or below pays the premium for 11 years, and a loan above 90 percent pays it for the whole term, which for a 30 year loan is 30 years. HUD's MIP duration guidance also says borrowers on those newer loans cannot cancel early by paying the balance down.

How the down payment changes the insurance rate

Because the rate grid keys off loan to value, the down payment decides which row you fall into. On a $300,000 home at a 6 percent rate, four down payments produce four different insurance bills.

The 3.5 percent column is the expensive one: 289,500 x 0.0055 = 1,592.25 dollars a year, or 1,592.25 / 12 = 132.69 dollars a month, and it runs for the full 30 years. Moving to 5 percent down crosses the 95 percent line, and the rate drops to 0.50 percent: 285,000 x 0.005 = 1,425 dollars a year, or 1,425 / 12 = 118.75 dollars a month.

The bigger jump is at 10 percent down. That puts the loan at exactly 90 percent, where the premium drops to 0.50 percent and stops after 11 years. The monthly saving looks small at first, since 270,000 x 0.005 = 1,350 dollars a year, or 1,350 / 12 = 112.50 dollars a month. The lifetime saving is where the money is: the total falls from $31,279 at 3.5 percent down to $13,872 at 10 percent down, because 19 years of premiums disappear.

Comparing a 15 year FHA loan with a 30 year loan

Term changes both halves of the insurance bill and the interest bill. Use the same $337,750 base loan with the upfront premium financed, so the balance is $343,660.63. At 6.5 percent over 30 years the principal and interest is $2,172.17. At 5.75 percent over 15 years it is $2,853.79, which is $681.62 more each month.

The insurance side flips in the other direction. A 15 year loan at 96.5 percent loan to value pays 0.40 percent, so 337,750 x 0.004 = 1,351 dollars for the year, or 1,351 / 12 = 112.58 dollars a month. That is $42.22 less than the 30 year loan, and the 15 year premium stops after 11 years instead of running the full 15.

Total interest falls by 438,320.19 - 170,022.02 = $268,298.17 when you take the shorter term, and total mortgage insurance falls by 37,088.63 - 11,827.62 = $25,261.01. The trade is cash flow: the 15 year payment is $681.62 higher each month, so the question is whether the budget can carry it without draining savings.

Debt ratios: what income the payment needs

A payment you can afford and a payment a lender will approve are two different tests. For a manually underwritten FHA loan the baseline is a housing ratio of 31 percent and a total debt ratio of 43 percent, with higher tiers allowed when the file has compensating factors such as cash reserves or a long history of saving. HUD lists the full matrix in the qualifying ratio guidance.

Run the $2,808.22 payment against a gross income of $7,500 a month. Housing alone is 2,808.22 / 7,500 = 37.4 percent, which is above the 31 percent baseline and lands in the 37/47 tier. Add a $450 car payment and $200 in student loans and total debt is 2,808.22 + 650 = $3,458.22, which is 3,458.22 / 7,500 = 46.1 percent. That fits under the 47 percent ceiling in that tier.

To clear the standard 43 percent line with the same debts, the income needed is 3,458.22 / 0.43 = $8,042 a month, or about $96,505 a year. To hold housing at the 31 percent baseline instead, the income has to reach 2,808.22 / 0.31 = $9,059 a month, which is roughly $108,700 a year. Those two targets are the practical difference between a loan that needs compensating factors and one that clears the default test.

Cash to close, and what this calculator leaves out

The monthly payment is not the only cash an FHA buyer needs. At closing you bring the down payment, the upfront premium if you pay it in cash, and closing costs. The Consumer Financial Protection Bureau puts closing costs at 2 percent to 5 percent of the purchase price, not counting the down payment.

On the $350,000 example that is 350,000 x 0.035 = $12,250 down, plus 350,000 x 0.02 = $7,000 to 350,000 x 0.05 = $17,500 in closing costs, plus $5,910.63 if you pay the upfront premium in cash. The total cash to close lands between 12,250 + 7,000 + 5,910.63 = $25,160.63 and 12,250 + 17,500 + 5,910.63 = $35,660.63. Finance the upfront premium and the range drops to $19,250 to $29,750.

A seller can help. FHA rules let interested parties put up to 6 percent of the sales price toward closing costs, prepaid items and discount points, but that money cannot cover your 3.5 percent minimum down payment. On a $350,000 home the cap is 350,000 x 0.06 = $21,000, which is more than the low end of the closing cost range.

Three things the calculator does not model. It does not add HOA dues to the insurance line unless you type one in. It does not know your county's actual tax rate, so check the assessor's site before you trust the tax line. And it assumes a fixed rate for the whole term, so an adjustable rate loan will move.