FHA Loan Calculator | Payment With Upfront and Annual MIP

How FHA Loan Payments Work

An FHA loan is a government-backed mortgage that lets you buy with as little as 3.5% down. In exchange for that low down payment, the FHA requires mortgage insurance in two parts: an upfront MIP of 1.75% of the loan amount (usually financed into the loan) and an annual MIP of 0.50% to 0.75% (30-year) or 0.15% to 0.65% (15-year) of the balance depending on loan size and loan-to-value, paid monthly. This calculator folds both into your payment so you see the real cost, not just principal and interest.

Monthly Payment = P&I + Monthly MIP (+ Tax & Insurance)

The Two FHA Mortgage Insurance Premiums

The upfront premium (UFMIP) is 1.75% of your base loan amount. Most buyers roll it into the loan rather than pay cash, so it increases the financed balance slightly. The annual premium (annual MIP) is 0.55% per year for typical 30-year loans up to $726,200 with less than 5% down (0.50% if you put down 5% or more), divided into 12 monthly payments. On many FHA loans the annual MIP lasts for the life of the loan, which is the key difference from conventional PMI that drops off at 20% equity.

FHA vs. Conventional

FHA shines when your credit is in the 580–680 range or you have limited savings, because it allows 3.5% down and is more forgiving on credit. The trade-off is the mortgage insurance, which often stays for the life of the loan. If you can put 20% down or have strong credit, a conventional loan may cost less overall because you can avoid or eventually drop mortgage insurance. Run both before you decide.

Frequently Asked Questions

How much is the down payment on an FHA loan?

FHA loans require a minimum 3.5% down payment for borrowers with a credit score of 580 or higher. On a $350,000 home that is $12,250. Borrowers with scores between 500 and 579 must put down 10%.

What is MIP on an FHA loan?

MIP is the mortgage insurance premium FHA requires. It has two parts: an upfront premium of 1.75% of the loan amount (usually financed into the loan) and an annual premium of 0.15% to 0.75% of the balance (0.55% for a typical 3.5%-down 30-year loan), paid monthly. It protects the lender, not you.

Does FHA mortgage insurance ever go away?

On most modern FHA loans with the minimum 3.5% down, the annual MIP lasts for the entire life of the loan; with 10% or more down (LTV 90% or less) it is cancelled after 11 years (HUD ML 2023-05). Otherwise the main way to remove it is to refinance into a conventional loan once you have built enough equity, typically 20%.

Is an FHA loan cheaper than a conventional loan?

It depends. FHA is often cheaper to qualify for with lower credit and a small down payment, but its mortgage insurance frequently lasts the life of the loan. Conventional loans let you drop PMI at 20% equity, so with strong credit and a larger down payment, conventional can cost less overall.

What credit score do I need for an FHA loan?

The FHA allows scores as low as 580 with 3.5% down, or 500 to 579 with 10% down. Individual lenders often set higher minimums (frequently 620), so your actual rate and approval depend on the lender as well as FHA rules.

Common Tip Percentages

Service	Typical Tip Range	Notes
Restaurant (sit-down)	15–20%	20%+ for exceptional service
Food delivery	10–20%	Consider extra for long distances
Taxi / rideshare	10–20%	More for assistance with luggage
Hotel housekeeping	$2–5/night	Leave daily, not just at checkout
Barber / hair salon	15–20%	On pre-discount total
Pizza delivery	10–15% or $3–5 minimum	Higher in bad weather

General Household Budget Ratios (50/30/20 Rule)

Category	% of Net Income	Examples
Needs	50%	Rent, groceries, utilities, insurance
Wants	30%	Dining out, entertainment, hobbies
Savings / Debt	20%	Emergency fund, retirement, extra payments

Common Measurement Conversions for Everyday Use

Quantity	US / Imperial	Metric Equivalent
1 cup	8 fl oz	237 mL
1 pint	16 fl oz	473 mL
1 quart	32 fl oz	946 mL
1 gallon	128 fl oz	3.785 L
1 lb	16 oz	453.6 g
1 ft	12 in	30.48 cm