FHA Loan Calculator
Calculate an FHA loan payment with the actual FHA math — 1.75% upfront MIP, monthly annual MIP, and the 11-year vs life-of-loan drop-off rule. Defaults to FHA's 3.5% minimum down payment.
Loan Details
$12,250 down
Default: 0.55% — blank uses HUD's standard rate for your term & LTV
Total Monthly Payment (PITI + MIP)
$2,811
MIP is paid for the full loan term (down payment < 10%)
Monthly Payment Breakdown
Base Loan
$337,750
Upfront MIP (1.75%)
$5,911
Total MIP Paid
$43,134
Total Cost (Life of Loan)
$851,905
FHA loan limits vary by county.
The 2026 floor is in the low $500,000s for most areas, with high-cost counties going past $1.2M. Check the official limit for your county at HUD's FHA Mortgage Limits lookup before assuming this loan size qualifies.
Who FHA Loans Are For
FHA loans are insured by the Federal Housing Administration, which lets lenders offer easier credit terms because the FHA backs the loan if the borrower defaults. They're built for first-time buyers, buyers with lower credit scores, and buyers who haven't saved a conventional down payment. Roughly 12% of U.S. home purchase loans are FHA in a typical year — much higher among first-time buyers.
The two headline benefits are the 3.5% minimum down payment and the credit-score floor of 580 (or 500 with 10% down). The trade-off is the mortgage insurance premium (MIP), which sticks around far longer than conventional PMI.
Down Payment & Credit Score Grid
| Credit Score | Minimum Down | Notes |
|---|---|---|
| 580+ | 3.5% | Lender overlays often raise the practical floor to 620–640. |
| 500–579 | 10% | Fewer lenders will work in this band; expect more documentation. |
| Below 500 | Not eligible | Focus on credit repair before applying. |
How FHA MIP Works (UFMIP + Annual MIP)
FHA mortgage insurance has two parts. The first is the upfront MIP (UFMIP), a one-time 1.75% premium on the base loan amount, charged at closing. Almost every borrower rolls UFMIP into the loan instead of paying cash — it adds about $5,250 to a $300,000 loan.
The second is the annual MIP, paid monthly. HUD's standard rates as of 2026 are about 0.50%–0.55%of the loan balance per year for 30-year loans (the higher rate applies above 95% LTV), and lower rates for 15-year loans. On a $300,000 FHA loan that's roughly $125–$140 per month at the start, declining slowly as the balance shrinks.
The drop-off rule is the part that catches borrowers off guard. If you put down less than 10%, MIP stays for the entire loan term — there is no automatic cancellation at 80% LTV the way conventional PMI works. If you put down 10% or more, MIP drops off after 11 years. That asymmetry is why so many FHA borrowers eventually refinance into conventional once they have enough equity.
MIP vs PMI: What's the Difference?
MIP (FHA) and PMI (conventional) both protect the lender against borrower default, but they behave very differently. PMI is risk-rated — your credit score and LTV move the rate, and it cancels automatically once your balance hits 78% of the original home value. MIP is flat-rated regardless of credit and either sticks for the loan's life (if down < 10%) or drops at year 11.
For strong-credit borrowers, conventional PMI is almost always cheaper and exits sooner. For weaker-credit or lower-down-payment borrowers, FHA is often the only realistic option even at the higher long-term cost.
When to Refinance Out of FHA
The most common FHA exit move is a refinance into a conventional loan once you have 20% equity. That removes MIP entirely. The math works when you have at least 24–36 months of remaining MIP payments and the conventional rate isn't materially worse than your FHA rate. Use the refinance calculator to model the break-even with closing costs.
If rates have moved against you (your FHA rate is well below current market), an FHA streamline refinance can lower your rate while keeping you in FHA — MIP stays, but at a lower interest rate. Many borrowers do a streamline first, then refinance to conventional later.
Frequently Asked Questions
What's the minimum down payment for an FHA loan?
FHA's minimum down payment is 3.5% of the home price for borrowers with a credit score of 580 or higher. Borrowers with scores between 500 and 579 can still qualify but must put down at least 10%. Below a 500 score, FHA financing isn't available. The 3.5% minimum is the headline reason FHA exists — it lets buyers with thinner savings get into a home much earlier than the typical 5%–20% conventional standard.
How long do I have to pay FHA mortgage insurance?
It depends on your down payment. If you put down less than 10% (LTV above 90%), you pay the annual MIP for the life of the loan — there is no automatic cancellation, unlike conventional PMI. If you put down 10% or more, MIP drops off after 11 years. You also pay a one-time 1.75% upfront MIP (UFMIP) at closing, which is almost always rolled into the loan amount.
Can I refinance out of FHA to drop MIP?
Yes — and it's the most common way borrowers stop paying MIP for life. Once you have at least 20% equity (either from paydown or appreciation), you can refinance into a conventional loan with no PMI. Run the numbers on closing costs vs. how many years of MIP you'd save; typical break-even is 2–4 years if rates haven't moved against you. If rates are higher than your FHA rate, the math may not work even with the MIP savings.
FHA vs conventional — which is cheaper?
For borrowers with high credit (740+) and at least 5% down, conventional is usually cheaper because conventional PMI drops off automatically at 80% LTV and is rate-shopped against the borrower's actual risk. FHA tends to win for borrowers with credit scores under 700 and/or down payments under 5%, because FHA's MIP rate is the same regardless of credit score, and qualification is much easier. Always quote both side by side.
What credit score do I need for an FHA loan?
FHA's official minimum is 500 (with 10% down) or 580 (with 3.5% down). But most lenders impose their own overlays of 620 or 640 — meaning a score below that won't get approved even though FHA's rules allow it. If you're between 580 and 620 you may need to shop multiple FHA lenders to find one without the overlay.
Are FHA loan limits the same everywhere?
No — FHA limits vary by county and are reset every year. The 2026 'floor' (used in most low- and average-cost counties) is in the low-$500,000s, while high-cost counties go above $1.2M. If you're shopping near the top of your local limit, check HUD's official lookup before assuming the loan size will qualify.