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FHA mortgage calculator

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FHA loans are ideal for first-time homebuyers with lower income and credit scores. Compared to a conventional mortgage, FHA loan eligibility is lenient — requiring only 3.5% of the purchase price down and a credit score as low as 580 for approval. But you’ll be on the hook for the FHA mortgage insurance premium (MIP) fee, which is 1.75% of the total loan amount plus a monthly premium.
Use our interactive FHA mortgage calculator to learn what your monthly payments could be, including taxes, insurance and mortgage insurance premium (MIP).

What to know about closing costs and other fees

Our FHA loan calculator provides customized payment estimates based on a property’s location, your down payment and the loan’s rate and term length. However, the payment estimates provided here don’t include closing costs and loan origination fees, which can range from 1% to 6% of the loan amount, depending on the state.

How MIP works

MIP stands for “mortgage insurance premium.” Because FHA loans only require 3.5% down and a FICO score of 580, MIP is designed to protect the lender in case the borrower defaults.
MIP is a two-part fee:

  • An upfront insurance fee (UFMIP) of 1.75% due at closing.
  • An annual MIP premium of 0.025 % and 0.050% of the total loan amount, paid in monthly installments as part of your mortgage repayment.

Both UFMIP and the annual MIP premium is based on your loan’s value. All FHA borrowers must pay UFMIP and annual MIP, regardless of the loan’s LTV.

Here’s an example FHA MIP calculation:

Mortgage amount: $250,000
Upfront MIP fee (1.75%): $4,375
Monthly MIP premium (.050%): $125

In some cases, you may be able to roll your upfront MIP fee into your mortgage payment instead of paying it at closing. However, the total interest paid on your loan over time will be higher if you choose to do this.

How long do I have to pay the annual MIP?

For FHA loans with a down payment of less than 10%, the annual MIP payment never drops off. To eliminate it, you must refinance your FHA loan to a conventional loan once your equity reaches 20%. If your down payment is 10% or more, MIP drops off after 11 years.

FHA eligibility

Compared to conventional, VA and USDA mortgages, FHA loans have unique requirements from other types of loans.

  • You need at least 3.5% down. FHA loans require a 3.5% down payment for borrowers with a FICO score of 580 or higher and 10% down for borrowers with FICO scores between 500 and 579.
  • Maximum loan amounts are based on location. These amounts change annually. For 2023, the maximum you can borrow is $472,030 in low-cost areas and $1,089,300 in high-cost areas.
  • You need at least a 500 to 580 FICO score. FHA loans rely on FICO scores and generally require a fair minimum credit score of 580, though a score as low as 500 might see approval with a higher down payment and mortgage rate.
  • FHA requires mortgage insurance for the loan’s lifetime. You’re required to pay a monthly premium (MIP) for the loan’s lifetime if your down payment is less than 10%. To get rid of it, you must refinance to a conventional mortgage.
  • You might need to meet stricter DTI standards. While your overall debt-to-income (DTI) ratio should remain under the 43% standard of most lenders, FHA dictates that your mortgage and related expenses can’t equal more than 31%.

For borrowers with credit scores of 580 and above and cash assets, DTI ratios may be more lenient — for example, allowing up to 40% DTI for mortgage-related expenses and up to 50% for all debt combined.

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