How to use the fha loan calculator
- Enter the home price and the down payment as a percent of the price. Enter your interest rate and choose the loan term.
- Enter the upfront mortgage insurance percent and tick the box if it is added to the loan. Enter the annual mortgage insurance percent.
- Enter property tax as a percent of the price and homeowners insurance per year. Add HOA dues if you have them.
- Read the total monthly payment and the breakdown. The percents are examples, so replace them with figures from your lender.
Formula
Base loan = price - down payment
Upfront premium = base loan x upfront %
Loan = base loan + upfront premium (if financed)
Principal and interest = loan x r / (1 - (1 + r)^-n), where r = APR / 12
Annual mortgage insurance, monthly = base loan x annual % / 12
Monthly payment = principal and interest + annual mortgage insurance + property tax / 12 + insurance / 12 + HOA dues. All premiums and rates are values you enter, rounded to the cent.
Worked example
For a $350,000 home with 3.5% down, the down payment is $12,250 and the base loan is $337,750. An upfront premium of 1.75% is $5,910.63, so financing it makes the loan $343,660.63.
At 6.5% for 30 years the principal and interest payment is $2,172.17. An annual premium of 0.55% on the base loan adds $154.80 a month, property tax of 1.1% adds $320.83 and insurance of $1,200 a year adds $100.
The total is $2,747.80 a month. Over the full 360 payments the interest comes to $438,319.39.
What the two mortgage insurance premiums are
FHA loans carry an upfront premium that is a percent of the base loan and an annual premium that is paid monthly. Many borrowers add the upfront premium to the loan rather than paying it in cash. The annual premium rate depends on the loan amount, the term and the down payment. For a 30 year loan up to $726,200, the HUD schedule is 0.55% a year with less than 5% down and 0.50% with 5% or more, and the upfront premium is 1.75%. How long the annual premium is charged also depends on those. Because those rules are set by HUD and change over time, the rates here are editable examples.
Paying the upfront premium in cash
If you clear the checkbox the premium is not added to the loan. The loan drops to the base amount, the payment is lower, and the upfront premium joins the cash you need at closing. In the example that moves the loan to $337,750 and raises the cash needed to $18,160.63.
How the annual premium is estimated here
Annual premiums are normally based on the average outstanding balance for the year, so they fall slowly as you pay down the loan. This tool uses the starting base loan for every month, which is a safe first year figure and slightly high later. For a payment schedule see the mortgage calculator.
Assumptions and limits
- The premium defaults follow HUD Mortgagee Letter 2023-05 for a 30 year loan with a base loan at or below $726,200: 1.75% upfront, and 0.55% a year when the down payment is under 5% (0.50% at 5% or more, and 0.70% or 0.75% for larger loans). HUD can change these rates, and shorter terms differ, so confirm with your lender. The down payment percent, interest rate, taxes and insurance are examples you can edit.
- Closing costs, lender fees, credit score effects, loan limits and how long annual premiums last are not modeled.
- Property tax is a flat percent of the home price. Use your local figure.
- This is an estimate and not a loan offer. Your lender's Loan Estimate is the document that counts.
Frequently asked questions
What is the minimum down payment for an FHA loan?
Lenders set it based on your credit and the program rules in effect, and 3.5% is commonly quoted. The field is editable and the page warns if you enter less than that. Confirm the figure that applies to you with a lender.
Is the FHA upfront premium refundable?
In some cases a partial refund is possible if the loan is paid off early through certain rules, but this depends on the program at the time. Ask your lender instead of relying on this tool.
Why is my lender payment a little different?
Lenders may use a different premium rate or basis, include or exclude fees, and round differently. Taxes and insurance also vary by location. Use the lender quote as the final number.
Can I compare an FHA loan with a conventional loan?
Yes. Run this calculator and the mortgage calculator with the same price and rates, and compare the monthly totals. Remember a conventional loan has its own mortgage insurance rules when the down payment is under 20%.