- Principal & Interest$0.00
- Annual MIP (monthly)$0.00
- Property Tax$0.00
- Home Insurance$0.00
FHA loans are backed by the Federal Housing Administration and designed for buyers with lower credit scores or smaller down payments. The minimum down payment is 3.5% (with a 580+ credit score). FHA loans require two types of mortgage insurance:
- Upfront MIP: 1.75% of the base loan amount, paid at closing (or financed into the loan).
- Annual MIP: 0.55% per year for 30-year loans (0.50% for 15-year), paid monthly. Removed after 11 years if down payment ≥ 10%; otherwise for the life of the loan.
FHA loan limits vary by county. This calculator uses standard MIP rates — consult a licensed lender for exact figures.
Reading your FHA payment: the two insurance pieces
An FHA loan makes buying possible with just 3.5% down and a credit score as low as 580 — but that access comes with a cost most first-time buyers underestimate: mortgage insurance, in two separate pieces. This calculator builds both into your payment so the number you see is the real one.
The first piece is upfront MIP — 1.75% of the loan amount, added to your balance at closing. Borrow $250,000 and you actually start at about $254,375. The second is annual MIP, currently around 0.55% of the balance per year, billed monthly. On that same loan it's roughly $115 a month baked into every payment.
The catch worth understanding before you commit: if your down payment is under 10%, FHA mortgage insurance stays for the life of the loan. It never drops off automatically the way conventional PMI does at 20% equity. Many borrowers eventually refinance into a conventional loan specifically to escape it.
FHA vs. conventional — how to actually decide
FHA isn't automatically cheaper just because the down payment is lower. Run the numbers both ways:
- Credit under 620, small down payment: FHA is often your best (or only) path, and the lower rate can offset the insurance.
- Credit 680+: a conventional loan may beat FHA overall, because you can cancel PMI at 20% equity while FHA insurance lingers.
- Planning to stay long-term with little down: factor in the lifetime MIP — it adds up over 30 years and tilts the math toward eventually refinancing.
Who FHA loans are built for
FHA exists to open the door for buyers conventional lending leaves out — first-time buyers, people rebuilding credit, and anyone who can't assemble a 20% down payment. Used with clear eyes about the insurance cost, it's a genuinely powerful tool. The mistake is treating "low down payment" as "cheap" without running the full picture, which is exactly what the calculator above is for.
Common questions
What's the minimum down payment for an FHA loan?
3.5% with a credit score of 580 or higher. Between 500 and 579, you'll need 10% down and fewer lenders will work with you.
Can I get rid of FHA mortgage insurance?
If you put 10%+ down, it drops after 11 years. Under 10%, it stays for the loan's life — the common escape is refinancing into a conventional loan once you have 20% equity.
Can I use an FHA loan for any home?
It must be your primary residence and meet FHA's minimum property standards, and the price must fall under your county's FHA loan limit. Investment properties don't qualify.
For the full details, read the complete FHA Loan Guide.