FHA Loan Calculator — What 3.5% Down Really Costs Each Month

Let's be real — saving 20% for a house feels impossible right now. That's why a lot of first-time buyers in the U.S. end up Googling FHA. You can get in with 3.5% down, but there's a catch most videos don't explain — FHA mortgage insurance. This FHA calculator shows you the full picture, not just the P&I. You put in your price, your 3.5% or 5% down, your rate, and it adds the FHA costs — 1.75% upfront MIP that usually gets rolled into the loan, plus the annual MIP that sticks around.

How FHA Actually Works (Without the Jargon)

Conventional loans have PMI that can go away at 80% LTV. FHA does it different. You pay 1.75% upfront — on a $350,000 home that's $6,125 — most people finance it, so your loan becomes $356,125 if you put 3.5% down. Then you pay annual MIP every month, usually 0.55% to 0.85% depending on loan amount and term. For most 30-year FHA with less than 5% down, 0.55% to 0.85% is common. That does not drop off automatically like conventional PMI when you reach 80% LTV. For a lot of borrowers, that is the trade for getting in with a 580 credit score.

How To Use This Tool Like You're Sitting With Me

Step 1 — Put your home price. Say $350,000 in Texas. Step 2 — Choose 3.5% down, that's $12,250. Step 3 — Enter your rate, maybe 7% today, and annual MIP 0.55% if your lender quoted that. Hit calculate. You will see base loan $337,750, UFMIP $5,910.63, financed loan $343,660.63, monthly MIP about $157.50, and your total housing estimate with taxes and insurance. That is the number that actually leaves your bank account.

Real Example: $350k in Houston

$350,000 price, 3.5% down ($12,250), $337,750 base loan + $5,910.63 UFMIP = $343,660.63 loan. At 7% for 30 years, P&I around $2,286.50. Add 0.55% annual MIP — about $157.50 per month. Add $350 taxes ($4,200 annual), $150 insurance ($1,800 annual). You are looking at about $2,944 per month. And yes, that MIP stays unless you refinance out later. That is the part many first-time buyers miss when comparing FHA vs conventional.

FHA Payment Formula - How We Calculate

M = P×[r(1+r)^n]/[(1+r)^n−1]

P is financed loan after UFMIP if financed option, r is monthly rate annual/12/100, n is total payments 360 for 30-year. Total = P&I + Tax/12 + Insurance/12 + HOA + MIP where MIP = Financed Loan × Annual MIP% /12. UFMIP = Base Loan ×1.75%. Base Loan = Price − Down. Financed Loan = Base Loan + UFMIP if financed, else Base Loan. Cash to close = Down + UFMIP if cash + 2.9% closing assumption for estimate.

What Affects Your FHA Payment? 5 Key Factors

• Down Payment: 3.5% minimum with 580+ credit. More down lowers base loan, UFMIP and MIP base.
• Interest Rate: Affects P&I directly. FHA rates often competitive but vary by credit, lender and market.
• UFMIP Option: Finance it and you pay more monthly but less cash at closing. Pay in cash and loan is smaller.
• Annual MIP Rate: 0.55% to 0.85% typical for 30-year. Higher loan amounts or lower down may have higher MIP.
• Taxes, Insurance, HOA: Vary by location. Add verified county tax and insurance quote for true payment.

FHA vs Conventional - Quick Tip From Experience

If your credit is 720+ and you have 5% down, run the same numbers in a conventional calculator too. Sometimes conventional with PMI is cheaper monthly than FHA, even with 3.5% down. Conventional PMI can drop at 80% LTV, while FHA MIP with less than 10% down stays for loan life. With 10%+ down on FHA, MIP drops after 11 years. Do not assume FHA is always cheapest — compare total monthly and cash to close. For $350,000 at 5% down, conventional loan $332,500 vs FHA financed $338,318.75 — FHA has UFMIP added.

How FHA MIP Works - UFMIP and Annual MIP Explained

FHA requires mortgage insurance regardless of down payment. UFMIP is 1.75% of base loan. Annual MIP is charged yearly and divided by 12. For 30-year term with LTV >95% and loan >$726,200, annual MIP is typically 0.85% and remains for life. For smaller loans with LTV >95%, 0.55% to 0.85% is common. For LTV ≤95% with 5%+ down, annual MIP may be 0.50% to 0.80%. For 15-year term, rates lower. This calculator uses rate you enter for flexibility — get current MIP from lender or FHA Mortgagee Letter.

Important Limitations

This tool gives you a quick math-based estimate so you can budget smarter. It is not a loan approval, not a rate lock, and not your final Closing Disclosure. Taxes, insurance, county fees, HOA and lender pricing change. MIP rates change by FHA guidance. Loan limits vary by county. For exact numbers, always check with your lender or servicer and review Loan Estimate and Closing Disclosure.

Frequently Asked Questions

Can FHA MIP go away?

Not on its own if you put less than 10% down — MIP stays for loan life. With 10% or more down, MIP drops after 11 years. Most people refinance into conventional when they hit 20% equity to remove MIP.

Is 580 credit enough?

FHA allows 580 with 3.5% down. 500-579 usually needs 10% down and lender overlays are stricter. Your rate will be higher with lower credit, and MIP rate is same regardless of credit, unlike conventional PMI which is credit-sensitive.

Does FHA have income limits?

No. Unlike USDA, FHA does not cap income. But it has loan limits by county — check your county's FHA limit for 1-unit property. 2026 baseline national conforming is $832,750, FHA limits are often lower in most counties but higher in high-cost areas.

What is included in FHA payment?

P&I on financed loan including UFMIP if financed, plus property tax divided by 12, homeowners insurance divided by 12, HOA and annual MIP divided by 12. Not including utilities or maintenance.

How accurate is this FHA calculator?

It provides mathematical estimate using inputs you provide and standard amortization formula. It cannot include every fee or county-specific cost. Use lender's Loan Estimate for final figures.